Appendix — Press v. United States
Supreme Court brief1965
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SUPREME COURT OF THE UNITED STATES
OCTOBER TERM, 1965
No. 63
PHILIP R. CONSOLO, PETITIONER,
vs.
FEDERAL MARITIME COMMISSION, ET AL.
ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS
FOR THE DISTRICT OF COLUMBIA CIRCUIT
INDEX
VOLUME II
Proceedings in the United States Court of Appeals
for the District of Columbia Circuit (Case Nos.
16,366 and 16,369) 243 243
Supplemental joint appendix consisting of portions
of proceedings before the Federal Maritime Board
(Docket Nos. 827, 835 and 841) 243 243
Letter from Herman Goldman to Federal Mari-
time Board, dated February 6, 1959 _....._..__... 248 244
Letter from Robert N. Kharasch to James L.
Pimper, dated February 10, 1959 - oes 249 246
Letter from Robert N. Kharasch to Jane ..
Pimper, dated April 2, 1959 _..... 251 247
Letter from Herman Goldman to James L.
Pimper, dated April 7, 1959 _ seit 252 249
Supplemental complaint (exeerpts) “(Docket No.
827 Sub. No. 1) - ; 255 252
Brief of Flota Mevcaute. Grenceloubions, ‘S.A.
IID > ccjectsscnnesinncteueigeatoq~veinabeinanubiasinmnabessenoiteiies 256 253
Recorp Press, Printers, NEw York, N. Y., Aucust 27, 1965
li INDEX
Supplemental joint appendix consisting of portions
of proceedings before the Federal Maritime Board
(Docket Nos. 827, 835 and 841)—Continued
Recommended decision of C. W. Robinson, Exam-
iner, on reparation, dated October 5, 1960 ____.
Exceptions of respondent Flota Mercante Gran-
colombiana, 8.A., and brief in support (ex-
cerpts)
Report of the Board
Order of the Board (Docket No. 827) _...
Order in the United States Court of Appeals,
dated August 11, 1961; vacated in part on
August 31, 1961. (Case Nos. 15,330, 16,366 and
16,369)
Transcript of proceedings (excerpts)—Novem-
ber 5, 6, 7, 11, 13, and 21, and December 2,
1958
Testimony of Jose J. Borrero—
(recalled )—
direct
Jack Friedlander—
(recalled )—
direct
cross
redirect
Philip R. Consolo—
direct
cross
Louis F. Meyer—
direct
cross
Maxwell Boyarsky—
direct
Jose J. Borrero—
(recalled )—
direct
Original Print
259 255
267 262
270 265
284 281
285 282
288 283
288 283
289 285
290 285
291 287
291 287
299 295
318 317
319 319
319 319
324 324
INDEX lii
Original Print
Supplemental joint appendix consisting of portions
of proceedings before the Federal Maritime Board
(Docket Nos. 827, 835 and 841)—Continued
Transcript of proceedings (excerpts)—May 9,
10, 11, 12, and 26, 1960 __ 332 326
Testimony of Max Boyarsky—
(recalled )—
direct 335 329
Louis F. Meyer—
direct 336 330
Shillo Adir—
direct : 337 331
Louis F. Meyer—
(resumed )—
direct oneal 337 332
cross 338 333
Shillo Adir—
(resumed )—
direct 340 335
Philip R. Consolo—
direct ie 342 338
cross ; 3 343 338
William Fanelle—
direct _ a. 347 344
cross = 356 353
SED aa 359 357
Alberto Sanchez—
a a 359 358
Harald Solvang—
direct : 363 361
cross - me 375 374
direct : 382 383
recross 383 384
Jose J. Borrero—
direct ; 384 386
Alfred A. Campion—
ME eae Ano a 389 391
Cross ___._ Seam ee 398 401
——
= i Original Print
Gepplemuntel joint oisiat consisting of portions
of proceedings before the Federal Maritime Board
(Docket Nos. 827, 835 and 841)—Continued
Transcript of proceedings (excerpts)—May 9,
10, 11, 12, and 26, 1960—Continued
iv INDEX
Samuel G. Staff—
direct 402 406
cross 408 419
Jack Friedlander—
direct 410 415
cross 417 493
Louis Grossman—
direct 421 495
Cross -... 424 499
Alvaro Diaz S.—
direct 426 430
cross 434 439
Exhibits: 436 441
No. 15—Agreement between Flota Mercante
Grancolombiana, 8.A., and Leonard Morey
and Samuel G. Staff, dated July 20, 1955
(excerpts) (Docket No. 827) —-..--. 436 441
No. 16—Agreement between Flota Mercante
Grancolombiana, S.A., and Panama Ecuador
Shipping Corporation, dated May 22, 1957
(excerpts) 436 442
No. 20—Letter from Flota Mercante Gran-
colombiana, S.A., to Panama Ecuador Ship-
ping Corp., dated June 19, 1958 437 443
No. 41—Consolo banana purchase and sale ex-
perience (excerpts) (Docket No. 827) _ __ 439 445
No. 42—Computation of damages for each
Grancolombiana sailing (excerpts) (Docket
No. 827) 442 448
No. 54—Banana freighting agreement—
freighter vessels—between Grace Line Inc.
and Banana Distributors Inc., dated May 2,
1958 (excerpts) os 444 450
INDEX
Supplemental joint appendix consisting of portions
of proceedings before the Federal Maritime Board
(Docket Nos. 827, 835 and 841)—Continued
Exhibits—Continued
No. 83—Letter from Flota Mercante Gran-
colombiana, S.A., to Andes Fruit & Produce
Corp., dated July 8, 1957
No. 88—Letter from Flota Mercante Gran-
colombiana, S.A., to Wm. Turino Company,
Inc., dated July 8, 1957 —
No. 107—Schedule of freights collected on ba-
nana imports into United States North At-
lantic Ports in vessels of Flota Mercante
Grancolombiana, 8.A., after “Cdad. de Bar-
ranquilla” Voy. 5 North
No. 111—Consolo banana purchase and sales
experience
No. 112—Computation of damages for each
Grancolombiana sailing
No. 113—Final summary of damages for Gran-
colombiana sailings
No. 115—Baltimore Service -..
No. 116—Schedule of cubic capacity allot-
ments ;
Proceedings in the United States Court of Appeals
for the District of Columbia Circuit (Case Nos.
RD ate ND si cient ecsnittimctetteecoomtcreineeenes ia
Second supplemental joint appendix consisting of
portions of proceedings before the Federal Mari-
time Board (Docket Nos. 827, 835 and 841) _.
Complainant’s reply to petition of respondent
Grancolombiana for extension of time to an-
swer complaint (excerpts) (Docket No. 827)
Letter from George F. Galland to G. O. Basham,
dated April 10, 1958 __.
Petition to intervene (Docket No. 827)
Ruling on motion for production of documents
for inspection and copying (Docket Nos. 827
and 835)
Vv
Original Print
445 451
446 452
447 453
448 454
456 450
451 457
452 458
455 461
456 462
457 462
463 463
465 465
467 467
468 468
vi
INDEX
Second supplemental joint appendix consisting of
portions of proceedings before the Federal Mari-
time Board (Docket Nos. 827, 835 and 841)—
Continued
Ruling on requests for bills of particulars and
for discovery and inspection of documents
(Docket Nos. 827 and 841)
Ruling on motions to take depositions and notice
of further prehearing conference (Docket Nos.
827 and 841)
Brief for petitioner Flota Mercante Grancolom-
biana, S.A., aud proposed findings of fact and
conclusions (excerpts) (Docket No. 835) _.
Brief of Panama Ecuador Shipping Corporation
(excerpts) (Docket Nos. 827, 835 and 841) __
Brief of complainant Philip R. Consolo (ex-
cerpts) (Docket Nos. 827, 835 and 841)
Complainant’s proposed findings and conclu-
sions .
Brief of Public Counsel (excerpts) (Docket Nos.
I a
Reply of Public Counsel to exceptions and to
motion to reopen the record for receipt of
additional evidence (excerpts) (Docket Nos.
_ 8s ” § : 4) er ere re
Letter from William J. Lippman to Examiner
C. W. Robinson, dated November 9, 1959
Letter from R. C. Giallorenzi to Examiner C. W.
Robinson, dated November 13, 1959
Letter from Robert E. Mitchell to Renato C.
Giallorenzi, dated November 18, 1959
Petition for review in the United States Court
of Appeals (excerpt) (Case No. 16,366)
Petition for review of an order of the Federal
Maritime Board in the United States Court of
Appeals (excerpt) (Case No. 16,369)
Brief for respondents in the United States Court
of Appeals (excerpts) (Case Nos. 16,366 and
pio shee Se ee
Original Print
469 469
471 47]
472 472
473 473
475 475
479 480
480 480
483 484
484 484
486 488
488 490
508 491
508 491
514 492
Original Print
Second supplemental joint appendix consisting of
portions of proceedings before the Federal Mari-
time Board (Docket Nos. 827, 835 and 841)—
Continued
Petition to reopen (excerpts) (Docket Nos. 827
and 827 (Sub. No. 1)) 525 493
Commission’s notice of reopening of proceeding
(Docket No. 827 (Sub. No. 1)) -—------------ 530 498
Respondent’s reply brief upon remand and re-
consideration (excerpt) (Docket No. 827 (Sub.
No. 1)) 540 499
Commission’s report and order dated September
16, 1963 (Docket No. 827 (Sub. No. 1)) ~~ 562 500
Order directing payment of reparations
(Docket No. 827 (Sub. No. 1)) ——-.---..... 575 514
Errata sheet to Commission’s report (Docket No.
ee BO ited ech nienininimnns 576 515
Further supplemental certifications of record by
Federal Maritime Commission in the United
States Court of Appeals (Case Nos. 18,230
RED iceiecustaa ena iieese: 577 515
Official Minutes (excerpts) (Docket Nos. 827,
827 (Sub. No. 1), 835 and 841) — ; 578 516
May 1, 1958 (Regular Meeting) ..-............. 578 516
June 22, 1959 (Regular Meeting) 580 519
June 22, 1959 (Special Meeting) — 581 520
January 25, 1961 (Special Meeting) _......_- 582 520
February 9, 1961 (Regular Meeting) 583 521
March 24, 1961 (Special Meeting) _..._.____ - 584 522
March 27, 1961 (Regular Meeting) 585 523
March 28, 1961 (Special Meeting) —......... 586 524
July 3, 1962 (Special Meeting) ee 587 524
October 29, 1962 (Regular Meeting) _...._ _. 588 526
September 16, 1963 (Regular Meeting) ___-
S.A.—Statement as to when each of our
vessels entered the banana trade between
Ecuador and United States North Atlantic
Ports (Docket No. 827) __. GB Ea A rane
Vili INDEX
Second supplemental joint appendix consisting of
portions of proceedings before the Federal Mari-
time Board (Docket Nos. 827, 835 and 841)—
Continued
Exhibits—Continued
No. 15—Agreement between Flota Mercante
Grancolombiana,- 8.A., and Leonard Morey
and Samuel G. Staff, dated July 20, 1955
(excerpts) (Docket No. 827) —--------.
No. 33—Banana Freighting agreement—
Freighter Vessels—between Grace Line,
Ine. and Philip R. Consolo, dated Septem-
tw Oh ie (eee =...
No. 34—Letters from Chilean Line to Philip
R. Consolo, dated July 28, 1958; September
3, 1958 (excerpts) and September 24, 1958
(excerpts)
No. 36—Memorandum of agreement between
Grace Line Inc. and Philip R. Consolo,
dated July 15, 1953 (excerpt) —~.-...
No. 37—Memorandum of agreement between
Grace Line Ine. and Philip R. Consolo,
dated July 15, 1953 .. oe
Letter from Grace Line ‘Ine. to Mr. Philip
R. Consolo, dated March 24, 1955 .
Letter from Grace Line Ine. to Mr. Philip
R. Consolo, dated July 20, 1955
No. 41—Consolo banana purchase and sale
experience (excerpts) (Docket No. 827) -...
No. 42—Computation of damages for each
Grancolombiana sailing (excerpts) (Docket
No. 827)
No. 110—Baltimore Stevedoring Grancolom-
biana arrivals, 9/18/59-4/15/60 (Docket No.
827)
Transcript of proceedings (excerpts) —-..
Prehearing conference, May 7, 1958 (Docket
Nos. 827 and 835) _....
Further prehearing conference, September 22,
1958 (Docket Nos. 827 and 841) _....__.
Original Print
591
592
593
597
602
606
607
608
610
612
613
613
621
528
530
531
536
556
INDEX ix
Original Print
gecond supplemental joint appendix consisting of
portions of proceedings before the Federal Mari-
time Board (Docket Nos. 827, 885 and 841)—
Continued
Transcript of proceedings (excerpts )—Continued
Hearing, November 5, 1958 (Docket Nos. 827,
835 and 841) 622 557
Hearing, November 6, 7, 11, 12, 20, 21 and 24,
December 1, 2 and 4, 1958 623 558
Testimony of Philip R. Consolo—
direct Se 623 558
cross = 628 564
redirect 629 566
cross 633 570
Jack Friedlander—
pS aa ee 638 574
Jose J. Borrero—
direct a 649 586
Jack Friedlander—
eed a An NO 654 591
a ES 658 595
Frank Visconti—
direct 660 596
Jose J. Borrero—
Cross - 663 599
Transcript of proceedings (excerpts) May 9,
1960 ss 671 607
Testimony of Max Boyarsky—
redirect ats 671 607
Shillo Adir—
examination by Mr. Kharasch 672 609
Louis F. Meyer—
direct 673 610
Shillo Adir—
(resumed )—
direct 680 617
AP RNR SARE SEDI a 680 617
Transcript of proceedings (excerpts) October 24,
1962 691 618
Oral argument (Docket No. 827 (Sub. No. 1)) 691 618
Motion of intervenor Philip R. Consolo 1) to dis-
miss the petition for review for lack of juris-
diction, or 2) alternatively, to require petitioner
to file bond (Case No. 16,369)
Memorandum in support
Reply of respondents to intervenor’s motion to dis-
miss or require a bond (Case No. 16,369)
Intervenor’s reply to answers to motion to dismiss
or require bond (excerpts) (Case No. 16,369)
Brief for petitioner Philip R. Consolo (excerpts)
(Case No. 16,366)
Reply brief of Philip R. Consolo, petitioner in Case
No. 16,366; and brief as intervenor in Case No.
16,369 (excerpt) —...
Opinion, Washington, J., Case Nos. 15,330; 16,366
and 16,369 decided April 26, 1962
Judgment, Case Nos. 15,330; 16,366 and 16,369,
dated April 26, 1962 ___.
Petition of Flota Mercante Grancolombiana, Ss. A.
for review of an order of the Federal Maritime
Commission (excerpts) Case No. 18230
Petition of Philip R. Consolo for review of a por-
tion of an order of the Federal Maritime Com-
mission (excerpt) (Case No. 18235) —
Supplement to petition of Flota Mereante Gran-
eolombiana, 8.A. for review Case No. 18,230 _.
Prehearing stipulation (excerpts) (Case Nos.
ES TIE sibiciiisininsaicnecesnatebicalilicinncebiilea
Addendum to prehearing stipulation (Case Nos.
18,230 and 18,235) ~
Prehearing order, December 16, 1963, “Case ‘Nos.
18,230 and 18,235 . 7
Order granting motion to supplement petition for
review, Case No. 18,230 . *
Opinion, Washington, J. Case. ‘Nos. ‘18, 230 ‘and
18,235, decided December 17, 1964 .. mane
Judgment, Case Nos. 18,230 and 18 235, ‘dated De-
ee =
Order allowing certiorari .
Original Print
694 = 620
695 621
719 = 637
728
734 847
737 = 649
739 650
758 «668
759 669
767 676
768 = 677
770 ~—s 679
775 ~—- 683
777 ~—s 684
778 ~—- 685
779 ~=—s-686
794 699
795 700
243
[fol. 242] [File endorsement omitted]
(fol. 243]
In THE United States Court or ApPEsis
For tHe District or Cotumsia Circuit
No. 16,366
Puiuip R. Consoro, Petitioner,
Sad
v
Feperat Maritime Boarp and
THe Unitep States or America, Respondents,
Frora Mercante Grancotomsiana, §.A., Intervenor.
No. 16,369
Frora Mercante Grancotomsiana, S.A., Petitioner,
v.
FeperaL Maritime Boarp and
Tse Unitep States or America, Respondents,
Puiuip R. Consoio, Intervenor.
Petition for Review of an Order of the
Federal Maritime Board
Supplemental Joint Appendix—Filed December 7, 1961
244
[fol. 248]
Berore THE F'eperaL Maritime Boarp
Herman GoLpMAN
Attorney & Counselor At Law
Equitable Building
120 Broadway
Tel. REctor 2-5535
Cable Address:
“Goldenlaw”
New York 5, N.Y.
February 6, 1959
Federal Maritime Board
Washington 25, D.C.
Re:
Docket No. 827—Philip R. Consolo v. Flota Mercante
Grancolombiana, S.A.
Docket No. 835—Flota Mercante Grancolombiana, S.A.
—Carriage of Bananas from Ecuador to the United States,
Docket No. 841—Banana Distributors, Inc. v. Flota Mer-
cante Grancolombiana, S.A.
Gentlemen:
Pursuant to $201.230 of the Rules of Practice and Pro-
cedure request, on behalf of Panama Ecuador Shipping
Corporation, is hereby made for an enlargement of fifteen
(15) days time within which to file exceptions and a brief
in support thereof to the decision recommended by Ex-
aminer C. W. Robinson, which said decision was served on
February 4, 1959.
The enlargement of time which is requested is urgently
required adequately to deal with such recommended deci-
sion for the reason that the premises upon which the deci-
sion proceeds are, I believe, contrary to or without founda-
tion in the record. In order to establish that such is the
245
case, and to comply with the requirements contained in
(201.228 of the Rules, and specifically the requirements
therein contained that alleged errors be stated with partic-
ularity and with references to the pages of the transcript
and exhibit numbers, it is necessary that the transcript of
the proceedings, which numbers approximately 1900 pages,
and more than 100 exhibits be carefully considered.
(fol. 249] I believe that the substantial interest of Panama
Ecuador Shipping Corporation in these proceedings cannot
adequately be conserved or protected if in the preparation
of exceptions and brief in support thereof the time to fiie
such exceptions and brief is limited to the fifteen (15) day
period provided by §201.228.
Apart from the foregoing consideration the enlargement
of time is sought for the further reason that Flias Rosen-
zweig, Who is the attorney in my office who hrs had charge
of and is most familiar with this matter, will, apart from
other previously scheduled business enjsagements, be en-
gaged within the balance of the fifteen (15) day period re-
maining under §201.228 in (a) a trial of an action of an
expected two days duration, (b) a hearing in an arbitration
proceeding which it is anticipated will consume one day,
and (c) at least two examinations before trial in actions
now pending in the United States District Court for the
Southern District of New York which examinations will
consume the better part of two days.
It is, therefore, respectfully submitted that the enlarge-
ment of time herein requested be granted and that the time
of Panama Ecuador Shipping Corporation to file excep-
tions, and brief in support thereof, to the recommended
decision be extended to and including March 6, 1959.
Respectfully submitted,
Herman Goldman
Attorney for
Panama Ecuador Shipping Corporation
246
BrEForE THE FEepERAL Maritime Boarp
February 10, 1959
Mr. James L. Pimper
Sec sry
Federal Maritime Board
Washington 25, D. C.
Re: Dockets 827, 835, 841
Dear Mr. Pimper:
This refers to Mr. Goldman’s letter of February 6, 1959,
on behalf of intervener, Panama Ecuador Shipping Cor-
poration, requesting an enlargement, until March 6, 1959,
of the time within which to file exceptions in these pro-
ceedings. We oppose the request, for the following reasons:
[fol. 250] (1) The letter asserts that additional time is
required so that the record may be “carefully considered.”
But Panama Ecuador submitted a 50-page brief to the
Examiner which cites the record in great detail. It thus
would appear that most of the work already has been done.
(2) Panama Ecuador re-intervened in these proceedings
at a late stage during the hearing (after once successfully
demanding that it be let out of the case). Its petition for
intervention was granted at the hearing only after the
Examiner received assurances. that the late—intervention
would create no delays (Tr. 1048-53). The delay now sought
is in direct conflict with representations made in the peti-
tion for intervention. As a late intervener, Panama Ecua-
dor’s interest in delay must be subordinated to the interests
of complainant, Philip R. Consolo, who is still being denied
the right to ship via Grancolombiana in defiance of two
prior decisions of the Board.
(3) The létter states that Mr. Rosenzweig has commit-.-2
ments which will occupy a portion of his time during the
balance of the 15-day period remaining before exceptions
are due. We would like to accommodate counsel, if it were
possible to do so without jeopardizing the interests of our
a
_
247
client. However, since the conflicting engagements will con-
sume only a fraction of the 15-day period, we must oppose
any extension of time. Inasmuch as the record already has
peen fully briefed, no convincing reason is shown why ex-
ceptions may not be prepared in the period allowed.
Very truly yours,
Robert N. Kharasch
William J. Lippman
Attorneys for Complainant
Philip R. Consolo
ee, All counsel
[fol. 251]
BerorE THE FEepERAL MariTiME BoarD
April 2, 1959
James L. Pimper, Esq.
Secretary
Federal Maritime Board
Washington 25, D. C. /
Re: Docket Nos. 827, 835, 841
Dear Mr. Pimper:
_.Phis-refers to the notice setting these proceedings for-
oral argument before the Board on June 10, 1959.
In the circumstances of this case, the delay of more than
two months would be highly prejudicial to the interests of
our client. We therefore request that the date be advanced
so that the argument may be held at the Board’s earliest
convenience, for the following reasons:
(1) Consolo’s complaint has been pending since Novem-
ber 15, 1957. The complaint alleges unlawful exclusion
from shipping facilities. Any unreasonable delays in the
final decision, therefore, serve to perpetuate the exclusion
-
248
—found by the Board in Consolo v. Grace Line, 4 F.MB.
273, and Banana Distributors v. Grace Line, 5 F.M.B, —_
and by the Examiner in his recommended decision in this
case to have been unlawful.
(2) Since his complaint was filed, complainant has dili-
gently prosecuted it before the Board. Respondent Gran.
colombiana also has expressed an interest in obtaining a
speedy determination of the issues, perhaps with a view to
minimizing reparations. Intervener Panama Ecuador, how.
ever, is now and for several years has been monopolizing
the refrigerated facilities. Its participation in the case has
been characterized by repeated attempts at delays. A fur.
ther long delay for oral argument thus amounts to a wind-
fall to Panama Ecuador, and grants it an extension of
its monopoly.
Because most of the issues in this case have previously
been considered by the Board, a relatively brief and simple
oral argument is required.
If any early argument is at all possible, we urge that in
[fol. 252] the interest of justice, to avoid real prejudice to
a diligent litigant, the case should be set for quick hearing.
Very truly yours,
Robert N. Kharasch
Attorney for
Philip R. Consolo
ee. All counsel
bee. Philip R. Consolo
249
BerorE THE F'eperaL Maritime BoarpD
HERMAN GOLDMAN
Attorney & Counselor at Law
Equitable Building
120 Broadway
New York 5, N.Y.
April 7, 1959
James L. Pimper, Esq.
Secretary
Federal Maritime Board
Washington 25, D.C.
Re: Dockets 827, 835, 841
Dear Mr. Pimper:
I refer to the letter of April 2, 1959 addressed to you by
Mr. Kharasch regarding the notice fixing the date for oral
argument to the Board and requesting that the date of
such argument be advanced.
I would suppose that the date fixed by the Board for such
argument was the earliest date which suited the convenience
of the Board with due regard for the other business which
the Board has before it. Implicit in Mr. Kharasch’s re-
quest is the suggestion that other matters be deferred and
that his client be preferred—such preference to be af-
forded because Consolo’s complaint was “diligently prose-
cuted” before the Board and Panama Ecuador’s “partici-
pation in the case has been characterized by repeated at-
tempts at delays”.
I would not trouble to address this letter to the Board
were it not for the fact that it has become impossible further
(fol. 253] to suffer uncomplainingly the unjust insinuations
which Consolo’s counsel now spread on the record for a
fourth time—such insinuations have already been con-
tained in their brief to the Examiner, their main brief to
the Board, and in their reply to Panama Ecuador’s excep-
tions. The time has come to set the record straight.
250
A—As to the “diligent prosecution” of Consolo’s com.
plaint:
1) I know of no action taken by Consolo’s counsel to
expedite the hearings in these dockets, and I believe that
the record will demonstrate that such counsel did nothing
other than to proceed with the matter in the regular, normal
course which like matters pursue before the Board. If this
be the “diligent prosecution” of which Mr. Kharasch speaks
it should not serve to obtain for him or his client a preferred
position.
2) I believe that Consolo or his counsel delayed the pro-
ceedings on the common carriage issue. The record will
disclose that it was at the insistence of Consolo’s counsel
that the issue of reparation was tried first. Session after
session before the Examiner was consumed in putting in
the proof of Consolo’s alleged damages, and it was only
on the motion of Banana Distributors that an end was
finally put to that time consuming procedure and the hear-
ings turned in the direction of the issue of common carriage,
the sole issue before the Board.
3) “Diligent prosecution” would, I believe, comprehend
compliance with the Board’s rules. Such rules require that
copies of briefs be dispatched to other counsel in such good
time as to permit of their receipt by such other counsel on
the date the brief is due to be filed with the Board, Consolo’s
counsel has consistently ignored this requirement. Copies
of their brief to the Examiner and their principal brief to
the Board were first mailed to other counsel on the filing
date. Their reply to the exceptions of Panama Ecuador
and Flota Grancolombiana was due on March 21. In fact
it was not served on the Board until March 23 on which
date copies were first mailed to other counsel. I do not
write of this failure of Consolo’s counsel to comply with
the Board’s rules as a suggestion that such briefs be not
considered but only to point out that Mr. Kharasch’s as-
sertion of “diligent prosecution” is one to which he would
have difficulty in gaining adherents.
[fol. 254] B—As to the “attempts at delays” by Panama
Ecuador:
_—
251
1) The record will demonstrate that Panama Ecuador’s
witnesses were available when required and testified without
prolixity. The record will also disclose that the time con-
sumed in cross examining Panama Ecuador’s principal
witness probably exceeded by far the time consumed in his
direct examination.
2) Mr. Kharasch’s letter fails to particularize the “re-
ated attempts at delays”. I assume they refer to (a) the
refusal to waive briefs to the Examiner and (b) the applica-
tion for a brief extension of time within which to file ex-
ceptions to the Examiner’s recommended decision. Suffice
it to say that in both instances the Examiner upheld Panama
Ecuador’s position. Perhaps the best proof of the fact that
Consolo’s counsel required the time allowed by the Exam-
iner consists of the fact that they utilized every minute of
the allotted time—even, as heretofore observed, at the
expense of compliance with the rules.
Lastly, I would point out only that Mr. Kharasch’s sug-
gestion that only “a relatively brief and simple oral argu-
ment is required” does not square too readily with his
request for 114 hours time for oral argument. I note also
that he has studiously avoided mention of the fact that
the reversal by the Court of Appeals of the Board’s deci-
sion in the Banana Distributors case casts a new complexion
~on the Whole-matter and makes it~one~ ot considerable
complexity.
Very truly yours,
ce All parties
252
[fol. 255] Service (omitted in printing).
BrEFrorE THE Feperat Maritime Boarp
Docket No. 827 (Sub. No. 1)
Puiip R. Consoto, Complainant,
v.
Fora Mercante GRraNcoLoMBIANA, S.A.., Respondent.
SUPPLEMENTAL CompLaint—Received November 18, 1959
Complainant alleges upon information and belief :
1. The allegations of paragraphs 1 through 10 of the
original complaint in Docket 827 (copy attached hereto
and marked Appendix A) are repeated and incorporated
herein.
Wherefore, complainant requests that in addition to the
relief requested in his original complaint in Docket 827, an
order be issued by the Board (a) ordering Grancolombiana
to pay reparation to complainant for his damages during
the period November 15, 1957, through September-t, 1959, —
in the amount of $250,000 and (b) awarding such other
and further relief as the Board may determine to be just
and reasonable.
Philip R. Consolo, 4425 North Michigan Avenue,
Miami Beach, Florida, By: Robert N. Kharasch,
Attorney.
[File endorsement omitted]
a
253
(fol. 256]
Berore THE FreperaL MaritiMeE BoarpD
* * * ~ * * *
Barer or Frora Mercante Grancotomsiana, S.A.—
July 7, 1960
Table of Contents
Page
Introduction 1
The Issues 4
The Facts 5
Argument:
Point I —Complainant’s Hands Are Uneléan .... 45
Point II —Consolo Is Not The Real Party In In-
terest 48
Point I1]—Consolo Has Neither Suffered Nor
Shown Damage 51
Point IV —Consolo’s Standard of Damages, Apart
From—Other Inadequacies,Is_Inap-... 4
plicable 70
Conclusion .. 77
Certificate of Service 78
Citations
American Banana Co. v. United Fruit Co., 160 Fed.
184, 188 69
Areher- Daniels-Midland Co. v. Great Northern R. Co.,
171 ICC 192, 195 68
Atlantic Coast Line R. Co. v. Geraty, 4 Cir., 1908, 166
Fed. 10 75
Bracket v. McNair, 14 Johns. (N.Y.) 170 (1817) ........ 73
Bridgeman v. The Steamboat Emily, 18 Iowa 510, 512
(1865) 74
254
Page
Brooklyn Eastern District Term. Co. v. US., 287 U.S.
170, 175 —
Brownlee v. Malco Theatres, (W.D. Ark. 1951) 99
F.Supp. 312 50, 69
Central Coal & Coke Co. v. Hartman, 8 Cir. 1901, 111
Fed. 96 . 49
Eastman Kodak Co. v. Blackmer, 2 Cir. 1921, 277 Fed.
694 iieantincisiies 47
[fol. 257] First National Pictures v. Robison, 9 Cir
1934, 72 F.2d 37 47
Goodman, A. J. & Son v. United Lacquer Mfg. Corp.
(D.C. Mass. 1949) 81 F.Supp. 890 .. 69
Grund v. Pendergast, 58 Barb. 216, 223 (1870) .......... 74
Hayes Pump & Planter Co. v. Atchison, T. & S.F. Ry.
Co., 171 ICC 13, 19
Hernandez v. Arnold Bernstein S.M.B.H. (S.D.N.Y.)
116 F.2d 849 (2 Cir.), cert. denied, 85 L.Ed. 1539 ....13, 76
ICC v. U.S. ex rel. Campbell, 289 U.S. 385, 390-3
(1933) 08-60, 63
Kobe, Inc. v. Dempsey Pump Co., 10 Cir. 1952, 198
F.2d 416, 426 63
McWhirter v. Monroe Cale. Mach. Co. (W.D. Mo.
——1948) 76 BF Sup p65 6 —seesereseeses cess 22 si cc Scie AI
Mid-West Theatres Co. v. Cooperative Theatres, (E.D.
Mich. S.D. 1941) 43 F.Supp. 216 47
Montgomery Ward & Co. v. Northern Pac, Term. Co.
(D.C. Ore. 1953) 128 F.Supp. 475 46
New Mexico ex rel. McLean v. Denver & R.G.R. Co.
203 U.S. 38 38, 70, 73
Patrick Lumber Company v. Calmar Steamship Cor-
poration, 2 U.S.M.C. 494 76
Peller v. International Boxing Club, 7 Cir. 1955, 227
F. 2d 593 50, 69
Pennsylvania R. Co. v. International Coal Co., 230 U.S.
184, 203-7, 212, 213-4, 243-4 ..... 51-8, 61, 68
Pittsburgh Banana Corp. v. N.Y., N.H. & H.R. Co.,
195 ICC 300, 301-2 68
255
Page
Twentieth Century-Fox Film Corp. v. Brookside Thea-
tre Corp., 8 Cir. 1952, 194 F. 2d 846, 859 -.................-- 63
Waterman v. Stockholms, 3 F.M.B. 248, 249 -...........--. 60, 61
Statutes
Interstate Commerce Act, Section 8 52
Shipping Act, Section 22 48, 52
Treatises
Benedict on Admiralty, 6th Ed. Vol. II, Section 230,
Page 48 ....... . 48
Dobie, Bailments and Carriers, Section 159 -.................-. 70-1
[fol. 259]
BerorE THE FeperaL Maritime Boarp
Complainant found injured to the extent of $259,812.26 by
respondent’s refusal to allocate to him refrigerated space
on respondent’s vessels for the carriage of bananas from
Ecuador to North Atlantic ports of the United States,
and reparation in that amount should be awarded, with
3 _—_—jnterest.— ———- ~~ — - - — -~ ~ +--+
Robert N. Kharasch and William J. Lippman for
complainant.
Renato C. Giallorenzi and John H. Dougherty for
respondent.
RecoMMENDED Decision or C. W. Rosrnson, EXxaMINER,
on Reparation—October 5, 1960
In Philip R. Consolo, et al. v. Flota Mercante Gran-
colombiana, 5 F.M.B. 633 (1959),' the Board found, among
other things, that respondent (Flota) was a common carrier
by water between the west coast of South America and
North Atlantic and Gulf ports of the United States, and
1 A consolidation of Docket Nos. 827, 835, and 841.
—
256
that its practice of contracting all of its refrigerated space
on vessels in those trades to one shipper of bananas to the
exclusion of other qualified shippers of bananas, was un.
justly discriminatory and unduly and unreasonably preju-
dicial and disadvantageous, in violation of sections 14
Fourth and 16 First of the Shipping Act, 1916. Nos, 997
and 841 were held open for further action on the claims for
reparation, if any. On September 1, 1959, in compliance
with the Board’s order, Flota executed space contracts with
all qualified shippers of bananas.
A supplemental complaint was filed by complainant Con-
solo (No, 827 (Sub. No. 1)) on November 18, 1959, the
allegations of which are generally the same as those in
No. 827. The avowed purpose of the supplemental com-
plaint is a “probably unnecessary precaution against the
running of the statute of limitations following the date of
the first complaint” (footnote 2, page 2, of complainant’s
opening brief on reparation). Hearing on Consolo’s claim
[fol. 260] for reparation has been held, and the parties have
filed opening and reply briefs.
The Board has found Consolo to be an experienced and
qualified banana shipper (5 F.M.B. 635, 638). Although re-
spondent delved into that phase of the matter during the
reparation hearing, no serious point is made of it on brief.
There is therefore no need for discussion of complainant’s
ability to finance the shipments upon which his claim for
reparation is based. It is undisputed that an ample quantity
of good bananas was available to Consolo in Ecuador had
he been able to secure space on Flota’s vessels. Flota argues
that Consolo should have tendered bananas when he ap-
plied for space, but with a commodity as perishable as
bananas, their tender would not have been a very smart
move on Consolo’s part, and certainly he was not required
to perform such a “futile and idle act.” Philip R. Consolo
v. Grace Line, Inc., 4 F.M.B. 293, 303 (1953). Tender was
not required in Hernandez v. Bernstein, 116 F.2d 849, 852
(2d Cir. 1941).
In assessing the possibility of sales of bananas which
Consolo might have imported on Flota’s vessels had he been
permitted to ship, it should be borne in mind that the volume
257
would not have been in addition to the quantity actually
handled by Flota since it would have been stowed in space
which other shippers were occupying. Intervener Panama
Ecuador Shipping Corporation (Panama Ecuador), which
had all the space but gave it up subsequent to the Board’s
decision on the merits, now charters entire vessels and
imports 31,000 more stems of bananas each week than it
did when shipping via Flota and via Grace Line, Inc.
The bananas Consolo would have had on the Flota vessels
would have been sold at the prevailing market prices at the
principal North Atlantic ports. The prices were substan-
tially the same at all of those ports. Wholesalers and
jobbers of bananas require a continuing supply of fresh
fruit because of the perishable nature of the commodity,
hence the more vessel arrivals there are the better oppor-
tunity the importer has to market his fruit at favorable
rices.
{fol 261] The sale of bananas on the wholesale level is
highly competitive, and purchasers generally are not tied
by contract or otherwise to a particular importer. The
record is clear, and it is so found, that Consolo could have
sold all the bananas he would have been able to import on
Flota’s vessels had he been able to secure space.
ft having been found that-Consolo-was~an~experienced
and qualified shipper of bananas, that he was denied space
unlawfully on Flota’s vessels, that an adequate supply of
good-quality bananas was available to him in Eeuador dur-
ing the times under consideration, that he was financially
able to purchase the fruit, and that he could have sold the
fruit at market prices had he been able to utilize Flota’s
vessels, the remaining issue is the amount of reparation
to which he is entitled, if any.
Generally, the measure of damages for failure of a com-
mon carrier to accept a shipment is the difference between
the value of the commodity at the place it would have been
tendered and its value at destination, less the cost of trans-
portation. McLean v. Denver & Rio Grande R.R. Co., 203
US. 38, 49 (1906) ; Sonken-Gulamba Corp. v. A.T. & S.F.,
124 F.(2d) 952, 958 (8th Cir. 1942). Flota contends, how-
ever, that Consolo could have minimized his damages by
258
utilizing other available transportation, three possibilities
being suggested: (1) Grace Line, (2) Chilean Line, ang
(3) charter of vessels.
(a) During the period under consideration there was no
additional space available to Consolo on the Grace ships,
and even when some of the Grace shippers relinquished
their space in 1958 Consolo was unable to obtain any of it,
(b) In September 1955, when the hearings commenced in
Banana Distributors, Inc. v. Grace Line, Inc., 5 F.M.B. 278
(1957) and 5 F.M.B. 615 (1959), Chilean Line was not a
satisfactory carrier of bananas because of its irregular
service and transit time. The service had improved to such
an extent in 1958, however, that Consolo booked the entire
available refrigerated space for five consecutive voyages,
During this period Consolo requested space for an addi-
tional 18 or 24 months but was refused. After Chilean Line
had circularized the trade in 1959 for prospective shippers,
[fol 262] replies were received from Consolo and one
Chilean company, the latter eventually receiving the space.
Even as late as May 1960 (the time of the present repara-
tion nearing) Chilean Line did not furnish a weekly ser-
vice such as is furnished by Grace Line and Flota. Fur-
thermore, Chilean Line generally carries no bananas during
the Chilean fruit season (December-May).
(c) Although Consolo was required to use reasonable
efforts to minimize his damages, this does not mean that
he should have chartered entire refrigerated vessels. It
ill-behooves a common carrier, which has failed in its duty
to perform for the public in general, to insist on such
extreme counter measures by a shipper deprived of space.
Consolo’s first attempt to secure space on Flota’s vessels
was late in 1954. Further discussions were had in the spring
of 1955, at which time Consolo inspected the space on one
vessel. A fixed price for the space was set by Flota, but
since Consolo was not satisfied with the physical charac-
teristics of the facilities, he made a counter offer, which
was rejected. In July 1955 the space was leased to the
organizers of intervener Panama Ecuador. Consolo again
259
inquired about space possibly late in 1955 and also in 1956,
put was told that all of it was under contract. By letter
of February 26, 1957, Flota advised Consolo to submit any
hid to the home office in Ecuador. This was done by letter
of March 6, 1957, directed to the entire space on five vessels.
By letter of June 21, 1957, Consolo was informed that the
space had been given to another firm (Panama Ecuador
interests). In the meantime, on April 29, 1957, the Board
had found that Grace Line was a common carrier of bananas
from Ecuador to the Atlantic coast of the United States,
and that its refrigerated space should be pro-rated among
qualified shippers of bananas (the Board’s order was dated.
August 19, 1957). Banana Distributors, Inc. v. Grace Line,
Inc., supra. As the result of this action by the Board,
Consolo wrote to Flota on August 23, 1957, and stated that
«before issuing any allotment of space on your ships, I wish
to be considered for a fair and reasonable amount since I
have consistently been asking for space on your ships for
the past two years.” Flota informed Consolo by letter of
(fol. 263] October 7, 1957, that all refrigerated space on its
vessels had been committed for the following two years, but
that it would be pleased, at the end of that time, to consider
Consolo’s application for an allotment.
It is apparent that Consolo was interested primarily in
the entire space on the Flota vessels until after the Banana
Distributors decision, even though the Board had passed
favorably on his earlier claim against Grace Line for the
same general relief (Philip R. Consolo v. Grace Line, 4
F.M.B. 292 (1953)), and that in his negotiations with Flota
he did not take into consideration the interests of other
banana shippers until his demand of August 23, 1957.
Flota’s status as a common carrier of bananas did not
squarely arise until Consolo’s demand of August 23, 1957
(and that of Banana Distributors in the same month, infra),
hence any reparation to which Consolo is entitled must
have its genesis as of that date.
Consolo predicates his damages on the use of 14 of the
space that could have been made available to him. Flota,
on the other hand, contends that only 18.46 percent of the
space would have been made available to Consolo. It there-
260
fore becomes necessary to determine (1) how many shippers
either did ship or could have shipped bananas via Flota
from August 23, 1957, to September 1, 1959, when all quali-
fied shippers were given space, and (2) the portion of the
total space each would or could have utilized during that
period.
In addition to Consolo, another shipper (“Noboa”, for
short), admitted by Consolo to be experienced in the banana
business, also submitted a bid for space in February 1957,
Furthermore, the contract with Panama Ecuador was re.
newed for three years on July 19, 1957. On August 6, 1957,
the attorney for intervener Banana Distributors wrote to
Flota and requested 50,000 cubic feet of refrigerated space
on each Flota vessel (approximately the full capacity) for
an unnamed client. Banana Distributors itself wrote to
Flota on August 26, 1957, and requested “immediate allo.
cation to this firm of a proportionate amount of your re-
frigerated space.” Both requests were rejected. Between
June and November 1957, applications for space were filed
by seven other persons or firms, but Flota made no investi-
gation as to their financial qualifications. Under the cir-
[fol. 264] cumstances, these seven applicants should not be
here considered. Thus, on August 23, 1957, Consolo, Pan-
ama Ecuador, Banana Distributors, and Noboa were the
only actual or potential shippers of bananas on Flota’s
vessels. Panama Ecuador’s witness testified, however, that
his company would not have accepted less than all of the
space, a position confirmed when the company did not seek
an allocation of space when Flota complied with the Board’s
order on September 1, 1959. This means, then, that only
three persons or firms might have shipped between August
23, 1957, and September 1, 1959 (Consolo, Banana Dis-
tributors, Noboa). When Flota opened the space to quali-
fied shippers it was found that only five were acceptable.
As it finally shaped up, Consolo received 18.46 percent of
the total space; this figure, referred to earlier herein, is
the maximum proportion of space against which Flota be-
lieves any computation of reparation to Consolo should be
made.
261
As his original complaint was filed on November 15, 1957,
Consolo maintains as a matter of principle that from that
time until September 1, 1959, he was entitled to half of the
space, the other half to be credited to Banana Distributors.
He is content, however, that a 14 division is “appropriate”
(Consolo’s opening brief, pages 21-22). There is no evi-
dence of sound probative value as to how the space would
have been divided among Consolo, Banana Distributors,
and Noboa had all three shipped during the period, hence
itis concluded that an equitable proration would have been
¥, to each of the three. Although the conclusion here
reached naturally is subject to some objection by the very
nature of the situation, a certain amount of latitude must
be allowed, and any doubt should be resolved in Consolo’s
favor. The law is satisfied with a practical solution. Of
general help in that respect are Power Comm’n v. Hope Gas
Co., 321 U.S. 591 (1944); Power Comm’n v. Pipeline Co.,
315 U.S. 575 (1942); Pennsylvania R. Co. v. Puritan Coal
Mining Co., 237 U.S. 121 (1915); Morrisdale Coal Co. v.
Pennsylvania R. Co., 230 U.S. 304 (1913).
In computing his damages, Consolo uses the loading,
outturn, and liquidation sheets’ for each shipment of ba-
nanas made by him on Grace Line vessels during the rep-
[fol. 265] aration period, and applies them against the
space that would have been used on Flota’s vessels at
Flota’s freight rates during the same period (Flota sup-
plied its freight charges, stevedoring costs, and numbers of
stems carried). This method of ascertaining damages is
logical and fair under the particular situation here present.
It is concluded and found that Consolo’s damages are as
shown in the following table.
Period Voyages Stems Net profit 1/3 net profit
8/23/57-9/1/59 105 1,133,927 $779,436.78 $259,812.26
1After deducting freight, stevedoring, overhead, and miscellaneous expenses.
In addition to the sum of $259,812.26, Consolo is entitled
to interest at six percent from the date of arrival of each
vessel from which he was shut out.
* Report of commission merchant rendered to importer, showing
proceeds of sale, certain expenses, commission fee, and net proceeds.
262
Recommendation
The Board should find that Consolo is entitled to repara-
tion in the amount of $259,812.26, plus interest at six per-
cent from the date of arrival of each vessel from which he
was shut out.
C. W. Robinson, Presiding Examiner.
G+tober 5, 1960
* * . * * * *
[fc 1. 267]
BEFORE THE F'EDERAL MarITIME Boarp
Exceptions or Responpent Fiota Mercante GRrancotom-
Brana, S. A. anp Brier 1n Support or Exceptions—
December 2, 1960
For the reasons stated in the following brief, Flota
Mercante Grancolombiana, S. A. (“Flota”), respondent in
the above proceeding, hereby excepts to the Examiner’s
Recommended Decision on reparations served on October 6,
1960.
Exceptions
Flota excepts to:
1. The Examiner’s ultimate recommendation that “Con-
solo is entitled to reparation in the amount of $259,812.26
plus interest at six percent from the date of arrival of
each vessel from which he was shut out.”
2. The Examiner’s failure to recognize that the Board’s
decision of June 22, 1959 did not purport to determine lia-
bility for the period prior thereto.
3. The incompleteness of the Examiner’s findings as to
the facts and circumstances confronting Flota prior to and
during the period for which reparations are sought, and
to his failure to consider and make complete findings
thereon, as contained in Flota’s opening brief on repara-
a
263
tions, dated July 7, 1960, and in Part III of the brief fol-
lowing these exceptions ; and his failure to find that in
light of such circumstances Flota’s actions were completely
reasonable and violated no provisions of the Shipping Act,
and no obligation to Consolo.
4, The Examiner’s failure to find that in any event
award of reparations would be inequitable and unjust, and
for that reason should be denied.
5. The Examiner’s inclusion of voyages subsequent to
the Board’s report of June 22, 1959, in calculating repara-
tions, and to his failure to find that Flota acted promptly
(fol. 268] thereafter to comply with the Board’s order, and
therefore incurred no liability during that period.
6. The Examiner’s failure to find that the burden of
proof upon all issues was upon Consolo, including the al-
leged violation prior to compliance with the Board’s order
of June 22, 1959; the alleged injury to Consolo during the
period ; and the extent of any such injury; and to his failure
to impose that burden on Consolo.
7. The Examiner’s failure to find that the record proves
there was no injury to Consolo and that Consolo’s claim
of injury is not bona fide.
8 The Examiner’s failure to find that Consolo’s claimed
losses are speculative.
9, The application by the Examiner of an incorrect mea-
sure of damages.
10. The Examiner’s incorrect computation of repara-
tions, including his arbitrary allocation to Consolo of one
third of Flota’s space, for calculation purposes; his failure
to appreciate the significance of the 18.46 percent figure
representing the allocation to Consolo following the Board’s
order of June 22, 1959; and other errors set forth in the
supporting brief.
11. The Examiner’s failure to hold Consolo is not the
proper party coraplainant.
——uy
264
12. The Examiner’s conclusion that Consolo could not
have minimized his damages, if any, by utilizing other
available transportation, including specifically Grace Line,
Chilean Line, and chartered vessels.
13. The recommended award of interest on reparations,
14. The Examiner’s subsidiary findings, or the Possible
implications therefrom, inconsistent with the foregoing ex.
ceptions, including, without limitation, the following:
(a) that Consolo is an experienced and qualified banana
shipper, and that there is no need to consider his ability to
finance shipment on which reparations are claimed (Ree,
Dee., page 2);
[fol. 269] (b) that “it is undisputed that an ample quan-
tity of good bananas was available to Consolo in Ecuador
had he been able to secure space on Flota’s vessels” (Ree,
Dec., page 2) ;
(c) that Consolo was not required to make a tender in
excess of his various letters requesting space (Ree. Dee.,
page 2);
(d) that the bananas Consolo claims he wouid have
shipped on Flota’s vessels would not have increased the
volume of bananas delivered to the United States (Ree,
Dec., page 2);
(e) that such hypothetical bananas would have been sold
at the market prices which in fact prevailed during the
reparations period (Rec. Dec., page 3);
(f) that the prices received by all importers at North
Atlantic ports were the same (Ree. Dec., page 3);
(g) that the greater the supply of bananas, the better the
price received (Rec. Dec., page 7) ;
(h) that Consolo could have sold all the bananas he would
have been able to import via Flota;
(i) the findings beginning at the bottom of Rec. Dec.,
page 2, and continuing through the middle of page 3, desig-
———S
265
nated “(a)”, “(b)”, and “(c)”, dealing with mitigation of
damages ;
(j) that Flota acquired the status of a common carrier,
and that this occurred on August 23, 1957 (Ree. Dec., page
8);
(k) to findings and conclusion that only three shippers
should be considered in allocating Flota’s space for repara-
tions computation (Ree. Dec., pages 5-6).
15. The Examiner’s failure to find that the renewal of
Panama Ecuador’s contract in 1957 was based upon an
option contained in the 1955 contract between Flota and
Panama Ecuador, and upon F'lota’s action determining that
Panama Ecuador’s bid was the most favorable to it, all of
which occurred prior to the Board’s decision in the Banana
Distributors case ;
16. The Examiner’s failure to find that there was no
significant competition between Consolo and Panama Ecua-
dor;
(fol. 270] 17. The method of ascertaining damages em-
ployed by the Examiner (Rec. Dec., page 7);
18. The Examiner’s failure to make subsidiary findings
as to the components of the recommended $259,812.26
reparations ;
19. The Examiner’s failure to enter findings in accord-
ance with the facts recited by Flota at pages 5-44 of its
opening brief on reparations dated July 7, 1960.
BEFrorE THE FEDERAL MaRITIME Boarp
Report oF THE Boarp—Submitted January 25, 1961 and
decided March 28, 1961
Thomas E. Stakem, Chairman; Sigfrid B. Unander, Vice
Chairman; Ralph E. Wilson, Member.
By the Board.
"i
266
I. Proceedings
By an order on June 22, 1959 the Board ordered that
the proceeding docketed as No. 827 be held open for further
proceedings on the claim of complainant, Philip R. Consolo
(Consolo), for reparations, if any, (5 F.M.B. 633, 641)
pursuant to Sec. 22 of the Shipping Act, 1916, as amended,
(Act). The present proceedings are in response to a com-
plaint to Docket No. 827 filed November 15, 1957 by Con.
solo requesting an order by the Board ordering Flota
Mercante Grancolombiana, S.A. (Flota) to pay reparation
for damages during the period November 4, 1955 through
November 4, 1957 in the amount of $600,000 and other relief
and to a supplemental complaint filed November 18, 1959
(Docket No. 827, sub. No. 1) by Consolo requesting an
order by the Board ordering Flota to pay reparation for
damages during the period November 15, 1957 through
September 1, 1959, in the sum of $250,000 and for other
relief.
By its report and order of June 22, 1959, served July 2,
1959, in Philip R. Consolo et al. v. Flota Mercante Gran.
colombiana, S.A., 5 F.M.B. 633 (1959) the Board found
Flota to be a common carrier by water in the operation
of ships between the west coast ports of South America
and United States Atlantic ports and found Flota’s practice
[fol. 271] of contracting all of its refrigerated space on its
ships operating between Ecuador and ports on the North
Atlantic coast of the United States to a single shipper to
be unjustly discriminatory and unreasonably prejudicial in
violation of the Act.
The further proceedings and hearing on the claim for
reparations were had by an examiner who, on October 5,
1960, submitted a recommended decision that reparations
were due in the amount of $259,812.26. Exceptions and re-
plies thereto were filed. Oral argument before the Board
was held on January 25, 1961.
II. Facts
Consolo, an experienced and qualified shipper of bananas
for many years between Ecuador and the United States
267
was found to have proven his complaint that Flota’s prac-
tice of excluding him was in violation of Secs. 14 ond 16
of the Act. The Board’s findings of fact, conclusions, deci-
sion and order on this phase of the proceedings were en-
tered of record and reported in Philip R. Consolo et al. v.
Flota Mercante Grancolombiana, S.A. (Supra).
In its report the Board found that Flota in the operation
of its freight ships between Ecuador and the U.S. North
Atlantic ports and U.S. Gulf of Mexico ports is a common
carrier by water in the foreign commerce of the US. (page
638). No date was established for the beginning of such
status, but Flota was shown to have operated since July 20,
1955 between Ecuador and the U.S. on an approximately
weekly schedule with 5 ships and that it now operates 6
ships. Consolo did not use any of these ships until Sep-
tember 1, 1959.
Consolo first expressed an interest in space in the Spring
of 1955 when he had a conference with Flota officers and
“made inquiry as to the height of each chamber [for banana
storage] and then the rate they were asking for the ships”.
He inspected a ship later and found fault with the height
of the storage chamber. Consolo was given figures as to
what Flota “wanted for the ships in its entirety” (sic) but
he asked for a reduced rate on the lower chamber or for
the two upper chambers at the proposed rates. The counter
offers were rejected. Other negotiations, for a contract by
[fol. 272] correspondence and by conversations in 1956 and
1957, did not result in a mutually acceptable arrangement.
At no time before August 23, 1957 did Consolo ask for an
allotment of space at a regular tariff rate, but accepted
the prevalent trade custom of either bidding or negotiating
for space on a contractual basis.
Consolo proved that he could have bought and sold 5,000
to 15,000 additional stems of bananas if Flota had allotted
him space.
By a letter dated August 23, 1957 addressed to Flota at
Bogota, Colombia, Consolo wrote asking “to be considered
for a fair and reasonable amount” of space on Flota’s ships.
The letter referred to our dockets Nos. 771 and 775 as the
268
basis for this request. Flota’s reply dated October 7, 1957
was that “reefer space on our vessels has been committed
for the next two years”.
By its order of June 22, 1959, served July 2, 1959 the
Board ordered Flota to cease and desist and to abstain
from entering into, or continuing or performing any of the
contracts, agreements, or understandings for the carriage
of bananas, found herein to be in violation of sections 14
and 16 of the Shipping Act, 1916 as amended, not later
than August 1, 1959”. Respondent was also ordered ty
offer, within 10 days after July 2, 1959, all qualified banana
shippers refrigerated space for the carriage of bananas,
No proofs were introduced in the present proceeding to
show how this order was complied with. An allotment of
space was made by Flota September 1, 1959 when Consolo
was one of five qualified shippers who applied for and were
allotted space.
III. Discussion
Sec. 22 of the Act authorizes any person to file a sworn
complaint “asking reparation for the injury, if any,” caused
by any violation of the Act. Exclusion of complainant,
Consolo, from the use of Flota’s common carrier service
from Ecuador has been found to be a violation of the Act.
Consolo filed a sworn complaint asking for reparations. An
examiner conducted proceedings in which the issues were
limited to ascertaining the period of injury and the com-
putation of the amount due as damages for injury. The
examiner recommended that complainant is entitled to rep-
[fol. 273] aration in the amount of $259,812.56 based on
105 voyages during the period August 23, 1957 to September
1, 1959, yielding a net profit of $779,436.78 of which Consolo
was entitled to one-third.
In interpreting Sec. 22 in R. Hernandez v. A. Bernstein
Schiffahrtgesellschaft, 1 U.S.M.C. 686 (1937) the US.
Maritime Commission held that defendants unjustly dis-
criminated against complainant in violation of paragraph
Fourth of See. 14 of the Act by refusing to book cargo in
response to applications by complainants for the trans-
269
rtation of automobiles. Complainant was shown to have
expotted unboxed automobiles by securing steamship book-
ing and then purchasing the automobiles therefor. Com-
lainant was also shown to have the ability to obtain auto-
mobiles for shipment. In some cases complainant also had
small lots of automobiles available in New York ready to
ship to Bilbao, Spain before booking. Defendants were
shown to have held themselves out as common carriers of
unboxed automobiles from New York to Bilbao. Their ships
were constructed to accommodate automobiles and capacity
was available. The number of automobiles required to ful-
fill complainant’s contract to sell to a dealer in Spain was
shown. Complainant proved a loss of 15% profit on pro-
spective shipments. Proximate injury was held to have
been caused complainant because of his inability to supply
automobiles pursuant to an agreement with the importer
in Spain. The case was assigned further hearing to deter-
mine the amount of reparations due, in the absence of evi-
dence (1) that all the cars upon which reparation was based
could have been carried by defendants, (2) as to the amount
of space which was available and, (3) as to the value of
the cars which could have been carried in such available
space.
te Roberto Hernandez, Inc. v. Arnold Bernstein S.,
M.B.H., 2 U.S.M.C. 62 (1939) the above elements were
proven and reparations equal to the estimated net profits
that would have been earned during the reparations period
were established.
The defendants having failed to comply with the order,
the appellant brought suit for enforcement pursuant to
See. 30 of the Act. The defendants resisted enforcement on
the ground that (1) there was no basis for the plaintiff’s
(fol. 274] claim and (2), it was plaintiff’s duty to mitigate
any damages. The District Court agreed in Roberto Her-
nandez, Inc. v. Arnold Bernstein S., M.B.H., 31 F.Supp. 76
(D.C.N.Y. 1940), but on appeal Cireuit Court, reversed in
116 F.2d 849 (C.C.A, 2d, 1941) stating that the District
Court raised too high a standard on which to test the proof
as to damages as found by the Commission. The Court
270
held that where the Commission’s findings “are supported
by substantial evidence . . . and where no new evidence on
the subject is introduced . . . it is the duty of the court to
accept and give them effect”. The duty of the court is
equally that of the Board. The basis for plaintiff's claim
was found to exist and the Court stated that “burden to
show a failure to mitigate the damages was upon the
defendants”.
In the reparation hearing in Waterman v. Stockholms
Rederiaktiebolag Svea et al., 3 F.M.B. 248 (1950), the
Board found that the complainants had not sustained the
burden of proof because of want of proof on “cost, outturn
and selling price” but in so holding acknowledged that dam.
ages are to be based on the difference between cost and
selling price, where there was a refusal to furnish refrig-
erated space to the complaining fruit shippers.
The Supreme Court has held that ordinarily “the mea.
sure of damages in such case [refusal to carry] is the dif.
ference between the value of the goods at the point of
tender and their value at the proposed destination, less
the cost of carriage.” New Mezico ex rel. McLean & Co. y.
Denver & R.G.R. Co., 203 U.S. 38, 27 S.Ct. 1, 3 (1906).
In accord are 9 Am. Jur. Carriers, §314, 3 Hutchinson on
Carriers (3rd Ed.) $$1359, 1370, 2 Moore on Carriers §609,
13 C.J.S. Carriers, $33, and see Sonken-Galamba Corp. v.
Atchison, T. dé S.F. Ry. Co., 124 F.2d 952, 958 (C.C.A. 8th,
1942).
In the present case proof of damages meeting the specific
standards of cost, outturn and selling price was offered in
detail. Witnesses were agreed on the availability of ba-
nanas in Keuador and the existence of a market for them
in the United States. Consolo was shown to have the re-
sources to buy and ship bananas. The loading sheets show-
ing actual purchases and the outturn sheets showing actual
[fol. 275] sales and “liquidation sheets” (report of commis-
sion merchant to importer showing proceeds of sale, ex-
penses, commission and net proceeds) were used, for each
shipment of bananas by Consolo on Grace Line ships during
the reparation period. The space that would have been used
271
on Flota ships at Flota’s freight rates during the reparation
period was shown. Costs in Ecuador were taken from actual
loading sheets showing actual purchases week-by-week.
Freight charges were supplied from Flota’s records of
actual freight collected on its voyages during the reparation
period. Stevedoring costs came from testimony of banana
shippers as to actual cost at New York. We find the figures
used in the reparation computation to be fully supported
inthe record. The computation itself, using the above data,
established a dollar figure for profit or loss per banana stem
shipped before stevedoring and freight. From the amount
of profit per voyage the freight stevedoring and incidental
administrative overhead and other expenses have been de-
ducted. The examiner’s conclusions were based on these
fully documented facts.
Consolo excepted to the examiner’s recommendation that
the reparation period did not begin until August 23, 1957
and to the failure to recommend that Consolo be awarded
reparation for the period November 15, 1955 through Sep-
tember 1959 inclusive. Consolo also excepted to an error
in computing damages within the period August 23, 1957 to
September 1, 1959 on the ground that the deduction from
profit for stevedoring costs should be the cost for stevedor-
ing in Philadelphia instead of New York. The New York
costs were shown to be 48.8 cents per stem whereas the ac-
tual Philadelphia costs were later shown to be 35.15 cents
per stem.
Flota excepted to the following:
1. The Examiner’s ultimate recommendation.
9 The Examiner’s failure to recognize that the Board’s
decision of June 22, 1959 did not purport to determine lia-
bility for the period prior thereto.
3. The incompleteness of the Examiner’s findings as to
the facts and circumstances confronting Flota prior to and
(fol. 276] during the period for which reparations are
sought, and to his failure to consider and make complete
findings thereon, as contained in Flota’s opening brief on
hi
272
reparations, and in the present brief; and his failure to fing
that in light of such circumstances Flota’s actions were com.
pletely reasonable and violated no provision of the Act, and
no obligation to Consolo.
4. The Examiner’s failure to find that in any event award
of reparations would be inequitable and unjust, and for that
reason should be denied.
5. The Examiner’s inclusion of voyages subsequent to the
Board’s report of June 22, 1959, in calculating reparations,
and to his failure to find that Flota acted promptly there.
after to comply with the Board’s order, and therefore in.
curred no liability during that period.
6. The Examiner’s failure to find that the burden of
proof upon all issues was upon Consolo, including the al-
leged violation prior to compliance with the Board’s order of
June 22, 1959; the alleged injury to Consolo during the
period; and the extent of any such injury; and to his failure
to impose that burden on Consolo.
7. The Examiner’s failure to find that the record proves
there was no injury to Consolo and that Consolo’s claim of
injury is not bona fide.
8. The Examiner’s failure to find that Consolo’s claimed
losses are speculative.
9. The application by the Examiner of an incorrect mea-
sure of damages.
10. The Examiner’s incorrect computation of repara-
tions, including his arbitrary allocation to Consolo of one
third of Flota’s space, for calculation purposes; his failure
to appreciate the significance of the 18.46 percent figure
representing the allocation to Consolo following the Board’s
order of June 22, 1959.
11. The Examiner’s failure to hold Consolo is not the
proper party compainant.
12. The Examiner’s conclusion that Consolo could not
have minimized his damages, if any, by utiliging other avail-
273
able transportation, including specifically Grace Line,
Chilean Line, and chartered vessels.
(fol. 277] 13. The recommended award of interest on rep-
arations.
14. The Examiner’s subsidiary findings, or the possible
implications therefrom, inconsistent with the foregoing ex-
ceptions, listing certain findings of fact.
i5. The Examiner’s failure to find that the renewal of
Panama Ecuador’s (Panama-Ecuador Shipping Corpora-
tion, exclusive shipper on Flota’s ships) contract in 1957 was
based upon an option contained in the 1955 contract between
Flota and Panama Ecuador, and upon Flota’s action deter-
mining that Panama Ecuador’s bid was the most favorable
to it, all of which occurred prior to the Board’s decision in
the Banana Distributors case; (Banana Distributors, Inc. v.
Grace Line, Inc., 5 F.M.B. 278 (1957)).
16. The Examiner’s failure to find that there was no
significant competition between Consolo and Panama Kcua-
dor.
17. The method of ascertaining damages employed by the
Examiner.
18. The Examiner’s failure to make subsidiary findings
as to the components of the recommended $259,812.26 repa-
rations.
19. The Examiner’s failure to enter findings in accord-
ance with the facts recited by Flota in its opening brief
on reparations.
The arguments supporting the exceptions are essentially
(1) that the Board did not, in Philip R. Consolo et al. v.
Flota Mercante Grancolombiana (supra), find Flota guilty
of violating the Act before June 22, 1959; (2) that in con-
tracting all of its refrigerated space for bananas to a single
shipper before then Flota acted legally, (3) that the failure
of the Board or the Board’s staff, prior to June 22, 1959, to
give Flota a legal opinion, in response to a petition for de-
a
274
claratory relief, as to the validity of Flota’s exclusive pat.
ronage contract prevents the Board from considering Flota
as having acted wrongfully; (4) that the complaint and re.
quest for the losses are speculative, the claim for reparation
is not bona fide, and the burden of proving loss has not been
sustained ; and , (5) the damages were incorrectly measured
and computed and interest should not be added.
For the reasons given below, we agree in part only with
the respondent’s exceptions as to the computation of rep-
[fol. 278] arations and to the award of interest on Trepara-
tions. The remaining exceptions are rejected. Exceptions
and proposed findings not discussed in this report nor re.
flected in our findings have been considered and found not
justified.
The 1st and 13th exceptions refer to the award of interest
on reparations. We find that it would be inequitable to
award interest on an unliquidated claim before it was due
and disallow any interest on the award herein.
In exception 2 respondent argues that it acted reasonably
and did not unjustly, unfairly or unreasonably discriminate
against Consolo and therefore did not violate any statute
during the period before the Board’s order of June 22, 1959,
In exception 3 the incompleteness of the findings is averred
and in exception 4 failure to find inequity in an award is
excepted to. Our report in 5 F.M.B. 633 has already held
that in the past “Flota has acted in violation of Sec. 14,
Fourth and 16 of the Act.” (639). The facts and circum-
stances omitted all relate to more arguments that Flota did
not violate the Act before June 22, 1959. Such facts and the
issues they raise have already been considered and decided
in the first proceeding and are not appropriate subjects for
exceptions in the reparations phase of this docket. The
examiner properly did not review these facts nor retry the
issues they raise. The previous report on these issues is
plain and is final as far as the Board is concerned. The only
remaining issue was the measure of the reparation Consolo
is entitled to under Sec. 22 of the Act. Facts bearing on
this issue alone were all the examiner was required to con-
sider.
275
The exceptions are also based on the argument that be-
cause Flota had contracted all of its space to another single
shipper during the period involved reparations would be
inequitable and unjust and the inclusion of voyages before
June 22, 1959, when the favored shipper’s contract was still
being performed, was not proper. This argument, too, uses
the erroneous premise that performance of the exclusive
patronage contract, during a time when Flota unjustly
discriminated against a shipper in the matter of cargo
space and gave undue and unreasonable preference or ad-
vantage to particular persons, was a valid excuse for non-
(fol. 279] performance of obligations under Sees. 14 and 16
of the Act. The performance of the contract is the very act
which constitutes the violation of such sections. We have
held that such conduct was improper in the following words:
“Itis... clear that they (Consolo and Banana Distributors,
Inc.) were denied reefer space accommodations by Flota,
to their prejudice and disadvantage, and that Panama Ecua-
dor, in receiving and using that space, was favored and ad-
vantaged. We find no justification for this conduct on the
part of Flota and conclude that in denying reefer space to
complainants, and in granting that space to a single favored
shipper, Flota has acted in violation of Secs. 14, Fourth and
16 of the Act.” Philip R. Consolo et al. v. Flota Mercante
Grancolombiana, (supra at p. 638). In other words, as long
as the contract caused the denial of space there was a vio-
lation. The violation did not begin June 22, 1959, but long
before this. There can be no question of inequity or unjust-
ness to a respondent who violates the Act by means of an
exclusionary contract. It is the excluded shipper who has
the equities on his side under the Act, not the favored
shipper nor the discriminatory and preference-giving car-
rier.
One of the arguments advanced to prove absence of fault
in failing to offer non-discriminatory and non-preferential
service was (1) that Flota had filed a petition for declara-
tory relief (Docket No. 835, decided in Philip R. Consolo et
al. v. Flota Mercante Grancolombiana, 5 F.M.B. 633 (1959) )
asking the Board to determine the validity of Flota’s con-
276
tracts and to terminate the uncertainty that had arisen ag g
result of the conflicting demands upon Flota following the
decision in Banana Distributors, Inc. v. Grace Line, Ine., 5
F.M.B. 278 and 5 F.M.B. 615 (1959) and, (2) that the Board
failed to make a timely response thereto. It was not incum.
bent on the Board, however, to give Flota a legal opinion on
the effect of its conduct on shippers. The demands were
conflicting only to the extent that Flota made them go by
continuing to serve favored shippers. The subsequent un.
certainty was the consequence of Flota’s own position that
it could continue to contract refrigerated space to preferred
shippers and to exclude complainants without violating the
Act as was contended in Grace Line v. Federal Maritime
Board, 280 F. 2d 790 (C.C.A. 2d 1960). In Philip R. Consolo
(fol. 280] v. Grace Line, Inc., 4 F.M.B. 293 (1953) and Ba-
nana Distributors, Inc. v. Grace Line, Inc., 5 F.M.B. 278
(1957) the Board decided that Grace Line, Inc. was a com.
mon carrier by water under sufficiently similar facts as to
lead the Board to state in the present case (5 F.M.B. 633)
that what we said in the Banana Distributors case “is ap.
propriate here, and we feel is dispositive of the issues in this
proceeding”. Instead of accepting the Grace Line cases as
providing a rule for its guidance, Flota refused to offer
service and litigated the issues relying on “arguments relat-
ing to the differences between Flota’s vessels and Grace’s
vessels” (635) to justify such refusal. Flota was eventually
found to have violated Secs. 14, Fourth, and 16 of the Act.
No delay converted its past violations into lawful conduct
and Flota must take the consequences of its refusal, (it be-
came a common carrier in 1955) to take Consolo’s cargo
after Consolo asked for non-preferential service in 1957.
Common carrier status is not created by nor are violations
of the Act non-existent until the Board’s report is served.
Both are brought about by Flota’s own actions beginning in
1955.
The 5th exception relates to the inclusion_in the-repara-
tions calculations, of voyages after June 22, 1959, which
is the date our report in No. 827 was “decided”. The ex-
aminer extended the damage period to September 1, 1959
277
when Consolo was actually allotted space in response to
the Board’s order served on July 2, 1959. Respondents
were ordered, within 10 days after the date of service of
the order, to offer refrigerated space for the carriage of
bananas on its ships to all qualified banana shippers. Flota
made no offers between June 22 and July 12, 1959, but we
have no reason to doubt that Flota would have offered space
on July 12 if bananas had been tendered in Guayaquil at
that time. None were tendered before then, as far as this
record shows. No shipments were ready until September,
but this does not furnish a reason for extending the dam-
age period beyond the date when the Board’s order should
have been complied with, in the absence of any offer of
proof by complainant of a refusal, after July 12, 1959,
and in the absence of proof of its own willingness to ship,
nor of a tender of cargo. The damage period should not be
(fol. 281] extended to the time when the complainant shipper
was ready to provide a cargo, but is limited to voyages
departing from Guayaquil through July 12, 1959, the date
when compliance should have begun. (Cf. Swift é Company
and Swift and Company Packers v. Gulf and South Atlantic
Havana SS Conference, et al., Docket No. 854 Decided Feb-
ruary 2, 1961.
The 6th, 7th and 8th exceptions all concern the proofs
of injury offered by complainant and allege a failure to
maintain the burden of proof or to show actual damage.
The burden of proof was maintained by extensive testi-
mony and exhibits showing availability of bananas, cost,
selling price (226 quotations over a period of four years
were shown) and freight, stevedoring and other expenses
as noted above. The actual damages were shown to be the
proximate result of violations of the statute. Waterman
v. Stockholms Rederiaktiebolag Svea et al., 3 F.M.B. 248,
249 (1950). The losses shown were not speculative, but
fairly inferrible from the data supplied and testimony of
_.witnesses-that-complainant-would_have shipped_on—Flota
ships if he had not been excluded.
The 9th, 10th and 17th exceptions deal with the method of
measuring and computing the damages. The examiner be-
278
gan the measure of damages from August 23, 1957 instead
of 1955 as claimed. We agree that the examiner’s date and
with the finding that Consolo’s offers and counter-offers
for service before then were for contract carriage and not
for space on a non-preferential basis. He was not excluded
before then because he never sought an allocation of Space
on an equal basis with other shippers; rather, Flota’s
facilities or charges for services were not acceptable to
the complainant on complainant’s terms. These negotia-
tions may not be translated into requests for a non-prefer.
ential allocation of space on a common carrier by water,
What Flota refused during this period was the demand for
a special contract which would make Consolo a favored
shipper too.
The examiner found Consolo entitled to one-third of
Flota’s space based on the fact that complainant was one
of three qualified applicants for space. Other applicants
were declared to be unqualified. When space was finally
allocated five shippers actually qualified and measure-
ment by Flota’s technical adviser showed that in actual prac.
[fol. 282] tice over a period of time there had been an al-
lotment to, and use by, Consolo of 18.46% of the cubic
capacity of Flota’s ships on the U.S. Atlantic run. This
actual experience with Flota appears to be a just and
reasonable guide of what Consolo was entitled to for the
purpose of measuring his past damages and it is adopted.
Respondent’s exception on this point is valid.
The 11th exception is found unsupported. |
The 12th exception deals with complainant’s failure to
minimize damages by using other means of transportation.
Once the failure to perform common carrier obligations and
exclusion is shown, “the burden to show a failure to miti-
gate the damages was upon the defendants”. Hernandez v.
Bernsteim, 116 F. 2d 849 (C.C.A. 2d 1941) at pp. 851, 852,
Fiota offered no such proof other than a suggestion that
chartered ships might be used, but no suitable ones were
shown to be available. Respondents have failed to show any
mitigating factors.
_
279
Exception 14 relates to the examiner’s subsidiary findings
of fact on which the award of reparations is based. None
is shown to be wrong, all have been fully established in this
docket. ‘
The 15th exception likewise assumes the untenable prem-
ise that discriminatory and preferential conduct did not
exist until after the Board’s decision on Consolo’s com-
plaint against Flota and that the contract which caused
such conduct excused the disregard of statutory obligations.
The 16th exception is unsupported by the record.
The 18th and 19th exceptions relate to the ascertainment
of damages. Complainant submitted extensive evidence of
lost profits in the form of schedules of about 226 individual
voyages between 1955 and 1959 showing for each voyage
the number of banana stems actually carried by named
ships on specified dates between Guayaquil, Ecuador and
Philadelphia, Penna. (with the exception of two ships which
discharged at Charleston, S.C. and Baltimore, Md. re-
spectively because of a strike at Philadelphia, Penna.).
In the absence of other proven data and of any disproof
of the complainant’s data or challenge of complainant’s
figures, such data and figures have been used in the com-
putation of reparations found to be due.
(fol. 283] The complainant’s profit per stem of bananas
is the difference in cost at Guayaquil and the value or sale
price at Philadelphia which is taken to be the total gross
profit per stem. This amount has been multiplied by the
number of stems on each shipment and the products added
to get the gross profit. From such total gross profit there
has been deducted (1) the total freight cost and (2) the
total estimated cost of handling the bananas at Phila-
delphia. The latter amount is 50.15 cents a stem (35.15¢ for
stevedoring, plus 3¢ for overhead, plus 12¢ for insecti-
cides, rope and bags) multiplied by 1,061,286 stems carried
during the reparation period. Complainant did not show
the 3¢ a stem deduction for overhead in its claim, but
this amount was deducted by the examiner with the subse-
280
quent admission by the complainant that it was a proper
amount. The examiner’s computation was also based upon
the use of New York instead of Philadelphia stevedoring
costs and omitted the deduction of the estimated incidental
costs of handling bananas at Philadelphia in the amount of
12 cents. The latter figure was also furnished by complain.
ant.
Based upon the shipment of 1,061,286 stems of bananas on
98 voyages between August 23, 1957 and July 12, 1959,
the use of the complainant’s statement of profits per Voy-
age totaling $2,513,236.43 on all voyages allowed, and the
subtraction therefrom of total freight in the amount of
$1,204,343.95 and incidental costs in the amount of $532,.
234.93, as proven by complainant, we find the remainder
is the proper net profit of $776,657.55. Consolo is entitled
- to 18.46% of the net profit. An award is hereby made and
shall be paid to complainant Philip R. Consolo of 4425 North
Michigan Avenue, Miami Beach, Florida, on or before 60
days from the date hereof, in the amount of $143,370.98,
with interest at the rate of 6% per annum on any amounts
unpaid after 60 days, as reparation for the injury caused by
respondent’s violation of Secs. 14 and 16 of the Shipping
Act, 1916, as amended.
By the Board.
Thomas Lisi, Secretary.
281
(fol. 284]
BerorE THE F'eperaL Maritime BoarD
No. 827
Pum R. ConsoLo
Vv.
Fiota Mercante GRaNCOLOMBIANA, S.A.
Orper—March 25, 1961
This proceeding being at issue upon complaint and an-
swer on file, and having been duly heard and submitted by
the parties, and full investigation of the matters and things
involved having been had, and the Board, on the date here-
of, having made and entered a report stating its findings
of fact, conclusions and decisions thereon, which report is
hereby referred to and made a part hereof ;
It is Ordered, That respondent Flota Mercante Gran-
ecolombiana, S.A. be, and it is hereby notified and directed
to pay unto complainant Philip R. Consolo of 4425 North
Michigan Avenue, Miami Beach, Florida, on or before 60
days from the date hereof, $143,370.98, with interest at
the rate of 6% per annum on any amounts unpaid after
60 days, as reparation for the injury caused by respon-
dent’s violation of Secs. 14 and 16 of the Shipping Act,
1916, as amended.
By the Board. —
Thomas Lisi, Secretary.
282
[fol. 285]
In tHE Unitep States Court or APPEALS
For THE District or CoLtumsiA Circurr
No. 16,369
Fiota MercanTe GRaNncotomsi4nA, S.A., Petitioner,
v.
FeperAL Maritime Boarp and Unirtep States
or America, Respondents,
Pur R. Consoxo, Intervenor.
Vacated by Order of the Court (August 31, 1961).
Vacating so much of this order as consolidates No. 15,330
with Nos. 16,366 and 16,369.
Before: Wilbur K. Miller, Chief Judge, and Washington
and Burger, Circuit Judges.
Orper—August 11, 1961
This case came on for consideration on intervenor’s mo-
tion to dismiss or in the alternative to require petitioner
to file a bond and said motion was argued by counsel.
Upon consideration whereof it is Ordered by the Court
that the aforesaid motion shall be held in abeyance pending
hearing of this case on the merits.
It is Further Ordered by the Court, sna sponte, that
this case and cases No. 15,330, Flota Mercante Grancolom-
biana v. United States and Federal Maritime Board and
No. 16,366, Consolo v. United States and Federal Maritime
Board are consolidated for the purposes of filing respon-
283
dents’ brief, filing a single joint appendix and for argu-
ment.
Per Curiam.
Dated: August 11, 1961.
(fol. 288]
Berore THE FeperaL Maritime Boarp
Transcript of Proceedings—(Excerpts)—November 5, 1958
Hearing Room 818
45 Broadway
New York, N.Y.
Hearing in the above-entitled matters was convened, pur-
suant to notice at 10:00 A.M., before C. W. Robinson,
Examiner.
e * * * * ae *
Josr J. Borrero having been previously duly sworn, was
recalled and was examined and testified further as follows:
Direct examination.
By Mr. Kharasch:
Q. Would you look at this Exhibit 15, please, and tell me,
what clause governs the ports at which your ships will dis-
charge bananas in the United States along the United
States Atlantic Coast?
A. Here, No. 1, for the transportation of bananas from
Guayaquil or Puerto Bolivar or Esmeraldas, Ecuador,
South America, to Philadelphia, Pennsylvania, U.S.A.
Q. Mr. Borrero, please direct your attention to Clause 21
again on page 17. Now I asked you and you answered, yes,
that the shipper had the option to carry on unloading op-
284
erations in Jacksonville, Charleston, and Savannah, and
Norfolk, or Baltimore, and you answered, yes. Now, does
not the next paragraph, after the first paragraph of 21,
provide in the case where the shipper notifies Grancolom.
biana of his choice of another port, after the vessel has
sailed from Ecuador?
Examiner Robinson: I think that just speaks for itself.
[fol. 289] Mr. Kharasch: Well, apparently it does not for
Mr. Giallorenzi. I think we ought to have the witness’
agreement. If you will permit him.
A. Yes.
Q. You agree?
A. Reads that way, yes.
Q. Now, I will ask you the question which was objected
to before. Would it be correct to say that under your
present arrangement with your present shippers, your
ships load at Guayaquil, Ecuador and come to North At.
lantic ports at the discretion of the shipper?
A. Subject to those particular conditions.
Q. Subject to the fact that they are the only ports
named?
A. These are the names before me, conditions of un-
loading.
* * * * * * *
Q. Well, the answer to my question is, no. Do you know
where the ships now load, your ships now load bananas at
Ecuador? The particular place? Port?
A. Well, the name of the port?
Q. It’s either Guayaquil, or Puerto Bolivar?
A. Yes.
onl . * *. * — | * 2 =")
285
Hearing Room 818
November 6, 1958
45 Broadway
New York, N.Y.
Jack FRIEDLANDER was recalled as a witness, and having
previously been sworn, was examined and testified as fol-
lows:
Direct examination.
By Mr. Kharasch:
Q. How did the seventy - seventy-two pound compare to
the weight of the fruit arriving in Philadelphia?
A. I’d say approximately three to five pounds heavier
than Philadelphia.
(fol. 290] Q. Heavier in Philadelphia?
A. Yes.
Q. Is there a reason for the Philadelphia fruit being
heavier than the New York fruit?
Examiner Robinson: City of Brotherly Love, of course.
A. I don’t know. Generally our bananas come from dif-
ferent areas, and the area from which the Philadelphia
fruit is loaded, probably runs a little bit heavier in weight.
At one time we were running substantially heavier in New
York than in Philadelphia.
Cross examination.
_ By Mr. Kurrus:
Mr. Giallorenzi: Have you loaded ships at Puna?
The Witness: Grancolombiana vessels? Never.
Mr. Kurrus: I said other than Puna.
286
A. We loaded at either Guayaquil or Puerto Bolivar.
Q. Mr. Friedlander, isn’t it true that your total cost of -
bananas f.o.b. the vessel are greater in Puna than they are
in either Guayaquil or Puerto Bolivar?
A. Substantially less in Puna.
Q. Do you pay an extra charge for transporting bananas
to Puna than you not on the Grace Line ships, that you do
not pay in transporting the bananas to the Grancolombiana
Line ships?
A. Sometimes it costs us substantially less.
Q. Why is the cost greater on the Grancolombiana Line
ships?
A. Cost of bananas from the area where we purchase the
bana” »s is substantially higher.
Q. Assuming that you have Puerto Bolivar fruit to be
loaded at Puerto Bolivar, how would it compare to load
that fruit, the cost, I mean, how would the cost compare
to loading that fruit at Puerto Bolivar as opposed to load-
ing it at Puna?
A. I wouldn’t load Puerto Bolivar fruit at Puna, proved
too costly.
[fol. 291] Q. Have you done it?
A. Yes, we’ve done it.
Q. How did the cost compare?
A. It was approximately 5 per cent higher.
Q. How about Guayaquil fruit, if you loaded that at
Puna, and loaded at Guayaquil, how would the cost com-
pare to that?
A. That would be about 5 per cent higher. Again, we
wouldn’t do it. Just like buying potatoes, if you live in
New York, and buying them in Chicago.
Q. Where does the fruit for the Crace Line ships
originate?
A. Adjacent to Puna.
Q. Do you know whether any originates in Guayaquil?
A. Very, very seldom.
287
Q. Talking about your own?
A. Our own?
_ Does any ever originate from Puerto Bolivar?
A. Very seldom.
* . 7 + * 7
Redirect examination.
By Mr. Kharasch:
Q. Now, does the fruit that loads on the Grace Line ves-
sels come from the same area in Ecuador that is loaded
on the Grancolombiana Lines?
A. Not usually.
Q. Does not in your practice?
A. Not usually, sometimes, yes.
Pur R. Consoto was called as a witness and having
been first duly sworn, was examined and testified as fol-
lows:
Direct examination.
By Mr. Lippman:
Q. You mention Puna, where is Puna, Mr. Consolo in
relation to Guayaquil?
A. Puna to the best of my knowledge is about 25 to 30
miles south of Guayaquil, just a body of water there that
Grace Line ships are not able to come up to Guayaquil
because of a draft problem, they picked this particular
body of water and put up four poles and call it Puna,
where the ship anchors we have to get down to Puna to
load.
« * + * * . *
[fol. 292] Q. Now, where does your fruit originate, Mr.
Consolo?
A. Various areas.
Q. At the present time where does it originate?
238
A. Some originate from Vinkes, some originate from
Baba, some originate from Duran and some originate from
Balao.
Q. Are these places you mentioned closer to Guayaquil
or Puna?
A. Three of the areas I mentioned are closer to Guaya-
quil and one area, Balao is of equal distance to Puna.
Q. If you can load your fruit at Guayaquil, would you
be able to save any of these expenses?
Mr. Giallorenzi: I object to this question because the
testimony is that the Grace Line vessels do not come up
to Guayaquil because of the draft and I don’t see how it
has anything to do with proceeding for reparations,
Examiner Robinson: I don’t either.
Mr. Lippman: Mr. Examiner, I think it has everything
to do with the proceeding for reparations.
Examiner Robinson: Why?
Mr. Lippman: Mr. Consolo is establishing his costs at
the present time. Now, in order to show that he is en.
titled to reparations we should be able to prove whether
or not those costs were decreased if he had been a shipper
on Grancolombiana Lines, if he had space on Gran-
colombiana Lines, in other words, neither one of those
ships goes up to Guayaquil.
The Witness: Yes.
Q. Will you explain your answer? In what respect will
you be able to save on the expenses?
A. As you notice as you go down these expense sheets
where it says Naranjal, where it says Baba, fruit from
this area, Duran, fruit from this area for a barge transpor-
tation or canoe transportation would be one sucres cheaper
to Guayaquil than it is to Puna and on the stevedoring ex-
pense when we take men to Puna we have to pay one and
[fol. 293] half the rate as is paid in Guayaquil, plus the
cost of canoe and tug service to Puna, plus the meals that
we have to provide the men.
289
Q. Suppose you had steamship space available enabling
you to ship additional 14,000 stems or some lesser amount
than you have been shipping, what effect would that situa-
tion have upon your costs in Ecuador?
A. None. As a matter of fact, it may lessen my over-
head. I would have to maintain the same office and the
same management and the only additional expense would
he extra selectors for these additional shipments so that
maybe instead of paying 7 per cent to the local company,
[may have reduced that to 5 per cent, that is the only dif-
ference I could see.
Q. If you could ship a greater volume?
A. Yes.
Hearing Room 818
November 7, 1958
45 Broadway
New York, N.Y.
By Mr. Lippman:
Q. Mr. Consolo, at the conclusion of the hearing yester-
day we were discussing the exhibit marked 24 for identifi-
cation.
A. Yes.
A. When I was discussing with Mr. Penaranda and Mr.
Borrero there was a question of three ports to come to;
either Baltimore—we talked about Philadelphia or New
York.
Now, it is important in the banana business to try to get
your bananas out to the port which after the ship leaves
Buenaventura it comes directly to a North Atlantic port,
which may be Baltimore first, which may be Philadelphia
or New York, and they told me that Baltimore would be
the first port that they would call at that time, probably
Philadelphia—the first port before they would take off
general cargo.
290
[fol. 294] When I wrote this letter I wanted to establish
the port that they would come first before taking off gen.
eral cargo, whether it was Baltimore, Philadelphia or New
York, and I was in agreement to take either one of those
three ports provided it was the first port of call into the
United States before taking off general cargo, and of al]
my experience I never heard of a contract on a shipping
company where a shipper can ask from ship to ship where
he wants the ship to be discharged with prior notice before
the loading. I have been operating with Grace Line for
five years—
* * * * . ‘\« .
Q. Are you able to obtain approximately 12,000 to 14.
000 additional stems in Ecuador for export to the United
States?
A. Yes.
Q. On what do you base your ability to do so, Mr,
Consolo?
A. From our experience in Ecuador and the availability
of bananas in Ecuador, our financial ability, and our know-
how in the business.
Q. Would you be able to sell an additional 14,000 stems
of bananas in the United States?
A. Yes.
* 7 * * * * *
Q. On what do you base your ability to sell 14,000 stems
of bananas a week in the United States?
A. With our present experience, with our commission
merchants, with our commission agents, or selling them
directly ourselves to the trade. |
Q. Have you had any recent experience, Mr. Consolo, _
which demonstrates your ability to do this kind of thing?
A. Yes, I have. :
Q. Would you explain what that consists of, Mr. Con-
solo?
A. August of 1958 I went into a temporary arrange-
ment with the Chilean Line for the export of bananas
from Ecuador to Baltimore. This is an irregular sched-
il
Rare 291
ale, calling Eeuador Puna—rather, every two weeks or less
or more.
In other words, no regular set day for its arrival in
Beuador, and this was operated from two trips to two-
trip basis, and the last one from trip to trip, and we were
able to purchase bananas in Ecuador to load these ships
and sell them in the United States at a comparatively
[fol. 295] same sales and purchase them in Eeuador for
approximately the same price that we purchased our regu-
lar shipments on the Grace Line.
Q. Mr. Consolo, at all times since November, 1955, could
you have purchased up to an additional 14,000 stems of
hananas in Ecuador for export to the United States?
A. Yes.
Q. At what price?
A. The same price we are paying—we paid during that
period.
Examiner Robinson: Let’s still tie it down a little
further.
You say 14,000 stems?
The Witness: Yes.
Examiner Robinson: Over what period?
Mr. Lippman: I said at all times since November, 1955.
Examiner Robinson: I know.
Do you mean by that for each shipment, otherwise it
could go for 14,000 stems over a three-year period?
Mr. Lippman: I think the record should clearly reflect
that my question is premised upon i4,000 stems each week.
The Witness: Yes.
Q. Could you have purchased that amount of bananas?
A. Yes.
Q. In Ecuador?
A. Yes.
Q. At what price?
A. At the same price that we paid during that period.
Q. In connection with your Grace Line shipment could
you have sold an additional 14,000 stems each week in the
United States at prevailing market prices?
292
A. Yes.
Q. Could you have sold such bananas if they had ar.
rived at Philadelphia instead of New York?
A. Yes. '
Q. At what price?
A. About the same price.
Q. Would it have made any difference from the stand.
point of the proceeds of the bananas if the vessel had ar-
rived in Philadelphia instead of New York?
A. I don’t see any difference.
(fol. 296] Mr. Kharasch: Mr. Examiner, may we go off
the record for one minute?
Examiner Robinson: Yes.
(Off-the-record discussion. )
Q. Mr. Consolo, have you had any shipment on the
Chilean Line which arrived at Philadelphia?
Mr. Giallorenzi: You didn’t go to Philadelphia.
The Witness: They made one trip to Philadelphia.
They requested it was more convenient for the ship to dis.
charge there.
A. (Continuing) Yes, I think there was one shipment
that went to Philadelphia.
Q. Will you speak up, please.
A. Yes, there was one shipment that went to Phila-
delphia.
Q. Which shipment was that?
A. That was shipment No. 4.
Q. When did that arrive in Philadelphia?
A. It arrived in Philadelphia October 24, 1958,
Q. What was the vessel?
A. The vessel was the steamship Maipo.
Q. How many stems were shipped on that shipment?
A. 6,168 stems.
Q. Were those bananas sold by R. Dixon & Co. for your
account?
A. Yes, they were.
293
Q. Did that vessel arrive in Philadelphia?
A. Yes, arrived in Philadelphia at Pier 66, South Phila-
hia.
“ Did R. Dixon & Co, get the same price for those
bananas as could have been obtained for bananas arriving
on the Grace Line at the same time during the same period.
a. Yes.
_ Were such prices, in fact, realized?
A. Ishould hope so.
Q. Mr. Consolo, could you refer to your records and
show us?
A. Yes.
Q. This vessel arrived on October 24, 1958, is that cor-
rect?
A. That is correct.
Q. Would you refer to your records to show us the near-
est arrival on the Grace Line, the arrival nearest to Octo-
ber 24, 1958?
A. October 23, 1958, the day before.
(fol. 297] Q. Which vessel was that?
A. That was the Santa Ines.
Q. That vessel arrived at New York?
A. Java Street, Brooklyn, New York.
Q. The bananas were sold in New York?
A. Yes, they were.
Q. What price was obtained ?
A. Practically the same price.
Mr. Giallorenzi: Is that a responsive answer?
Mr. Lippman: You can read the prices, Mr. Consolo.
The Witness: Yes.
Q. What price was obtained on the bananas shipped on
the Chilean Line?
A. The price obtained on the bananas shipped on the
Chilean Line for select bananas was $8.50 per hundred-
weight with the exception of one, two, three, four, five
trailers. Two were received at $8.00 per hundredweight,
one was received at $7.50 per hundredweight and two were
received at seven cents per hundredweight.
Q. In those trailers how many stems were involved?
294
A. Those trailers that were involved: 280, 350, 321, 340,
and 500.
Examiner Robinson: Let me ask you something. Diq
you actually mean a hundredweight or a hundred pounds?
The Witness: The price?
Examiner Robinson: No, on the stems. Do you mean a
hundredweight or a hundred pounds?
Mr. Kharasch: There was also an expense of seven
cents per hundred pounds.
The Witness: Seven dollars per hundred pounds.
Q. That was out of a total shipment of 6,168 stems?
A. I want to elaborate on these prices.
Q. What was the reason for the lower prices on those
five truckloads?
A. In Eeuador we have one of our suppliers who has
small fruit, referred to eight hands, instead of the regular,
Q. Is that the name of the supplier or the fruit?
A. The fruit.
Examiner Robinson: Off the record.
(Off-the-record discussion. )
(fol. 298] The Witness: We had a supplier on this par.
ticular shipment in Ecuador who had eight hand bananas
who wanted to sell them to us and we agreed to buy them
for about 40 per cent of the value of the others, and the
cost sheet in Ecuador will so reflect the cost.
Although I received the prices I have stated per hun-
dred pounds here I realized more profit in dollars than if
I had bought regular nine hand and better at the prevailing
prices in Ecuador.
~ Q. Will you refer—
The Witness: (Continuing) That was only a business
adjustment. It has no reflection on profits where you see
the lower price there.
Q. Will you refer to the Grace Line arrival of October
23rd.
A. Yes.
295
_ What were the prices which those bananas were sold,
Mr. Consolo?
A. All the select fruit was sold at $8.50 per hundred
unds with the exception of one local trailer with a hun-
dred stems at $8.00 per hundred pounds.
Q. How did the ripes and rejects for those shipments
compare, Mr. Consolo?
A. It varies on each cargo the amounts of ripes and
rejects.
_ What about the experience on this Chilean arrival as
compared with the Grace Line arrival?
A. Some have a little less percentage of ripes on the
Grace Line. I would have to go over the records.
Q. Iam talking about this particular shipment.
A. The ripes and rejects of 6,168 was 215 stems ripes
and rejects.
Q. That is the Chilean Line?
A. Yes.
Q. And the Grace Line vessel?
A. 5,624 stems, about 430 stems of ripes and rejects.
Examiner Robinson: Off the record.
(Off-the-record discussion. )
Q. The number of stems arriving on the Santa Ines,
what was the total number?
A. Ican see from this record it was 5,624.
> . * _ + * *
[fol. 299] Cross examination.
By Mr. Giallorenzi:
* * * * * * *
Q. You testified that you were engaged in the banana
business under the name of Philip R. Consolo?
A. My contract with Grace Line is under Philip R.
Consolo.
Q. Do you engage in business under any other names
since that date?
296
A. Yes. I have corporate names that I use.
Q. Will you please tell us the names of the corporations
that you have used from 1953 to date?
A. We have operated in Ecuador under Pacific Fryit
Company, and presently as Ecuador Fruit Company. —
In the United States under Atlantic Fruit Company and
as Dover Banana Company.
Q. Is that all?
A. There is others I have operated.
Q. In the banana business since the early part of 1953,
is that right?
A. The early part of ’53.
. * e * * ° e
Q. Now turn to Ecuador Fruit Company.
A. Yes.
Q. Is that an Ecuadorian corporation?
A. Yes, it is.
Q. Are you an officer of that corporation?
A. Ecuador Fruit Company?
Q. Yes.
A. No, Iam not.
Q. Are you a stockholder of that company?
A. Yes.
* * . . * * *
Q. Are you the sole stockholder of the company?
A. No, Iam not.
Q. Are you the majority stockholder of the company,
Mr. Consolo?
A. Yes, lam.
* * * o -_ 6 e
[fol. 300] Q. Is Ecuador Fruit Company the successor to
Pacific Fruit Company, Mr. Consolo?
A. Yes.
Q. And Pacific Fruit Company was formed about three
months after you received the Grace Line space contract?
297
A. Just about, I would say—three or four months, I
don’t know the exact time.
Q. This company is your buying agent, as I understand
it, in Ecuador?
A. I don’t say it’s a buying agent—it’s a buying com-
_ It buys bananas to sell bananas.
Q. Will you explain that to me?
A. It is a company, it is a separate company operating
in Ecuador under the laws of Ecuador to buy and sell
bananas and go into any business that it deems necessary
to go into.
It isn’t confined just to buying and selling bananas. It’s
a corporation standing on its own right in Ecuador to do
business.
© * * * * e *
Q. So that the two companies that it buys bananas for
for distribution in the United States are yours and the
Dover Banana Company?
A. Presently?
Q. Yes.
A. Yes.
* * * o * . -_
Q. When was Dover Banana Company formed?
A. I would have to look at my records.
Q. To your best recollection, Mr. Consolo.
A. I believe in about 1957, April or May of 1957.
* * * * * oe *
Q. Do you know under the laws of what state it was
formed, Mr. Consolo?
A. I think it’s under the law and State of Delaware.
* * * * * * *
Q. Can you tell me where the principal place of business
is, Mr. Consolo?
A. Miami, Florida.
* * * * * * *
(fol. 301] Q. Are you the principal stockholder of this
company, Mr. Consolo?
A. No, I am not.
298
Do you know who is the principal—
Yes.
Would you tell us, please?
. Charles Consolo.
That is your brother?
Yes.
Are you an officer of this corporation?
No, I am not.
Are you a director of this corporation?
. No, Iam not.
POPOPOPOPO
©
. Does Dover Banana Company have a space contract
with Grace Line?
A. No, it does not.
Q. I notice on your Exhibit 26, outturn report of R.
Dixon—
A. Yes.
' Q. (Continuing) —involves a shipment which arrived on
October 23, 1958 on the Santa Ines?
A. Yes.
Q. This statement you testified was prepared by your
agent, R. Dixon & Co., is that right?
A. That is correct.
Q. I notice that it is addressed to Dover Banana Com.
pany, Inc., is that right?
A. Yes.
Q. Were these bananas imported for the account of
Dover Banana Company, Inc.?
A. Yes, they were.
Q. That was using your space?
A. That is correct.
Q. Did you receive any compensation for that, from
Dover Banana Company, Inc.?
A. Yes, I did.
* « . + * *
299
Q. Since Dover Banana Company, Inc. was formed, do
you know how many shipments of bananas were carried on
the Grace Line for its account?
A. Well, I would have to go back to the records to find
out how many.
* * * oe * * *
(fol. 302] A. October 30th there would be sixty-five ship-
ments from Dover Banana Company.
Q. They were all on the Grace Line, which you held the
space contract, is that right?
A. Not I alone.
Q. Would you please explain to us what you mean by
that last statement, Mr. Consolo?
A. I had three-quarters of a chamber and Charles Con-
solo has one-quarter of a chamber.
* * * * * * *
The Witness: Yes. Charles Consolo is my brother and
associated in this business.
Q. Did the Grace Lixe enter into a space contract with
your brother?
A. Yes.
Q. Was that in the name of Dover Banana Company,
Inc., Mr. Consolo?
A. Yes.
Q. Or Charies Consolo?
A. Charles Consolo.
Q. So that the sixty-five shipments which were carried on
the Grace Line were outturned from that one particular
chamber that you and your brother have individually?
A. That is correct.
Q. And the sale of these bananas, the proceeds, were
credited by R. Dixon & Co. to Dover Banana Company,
Inc., is that right?
A. That is correct.
300
Q. Did you have an agreement with Dover Banana Com.
pany, Inc. for the purpose of letting them use the space
on the Grace Line vessels which amounts to three-quarters
of one chamber?
A. Do I have an agreement?
Q. Do you have any such agreement?
A. Not in writing. There is no written agreement.
Q. Do you have an oral agreement for them to use this
space, Mr. Consolo?
A. They are using the space for the importing of the
bananas into the United States.
[fol. 303] Q. Is that pursuant to an oral agreement that
you entered into with Dover Banana Company, Inc?
Examiner Robinson: If it is not in writing, I think we
will have to assume it is.
Mr. Giallorenzi: All right.
Q. When did you enter into this oral agreement with
Dover Banana Company, Inc. where you allowed them to
use three-quarters of your chamber on the Grace Line?
The Witness: Let me verify that a little bit. The first
nineteen shipments under Dover Banana Company—eight-
een, rather, was the space held under Philip R. Consolo.
Q. On the Grace Line?
A. Yes.
Q. Go ahead.
A. Then I think October—the next shipment from there
on was three-quarter space under my name, when the new
contracts came out, and one-quarter space under Charles
Consolo.
Q. When did you enter into this oral agreement with
Dover Banana Company wherein you allowed them to use
three-quarters of your space, all of the three-quarters of
the chambers which you had contracted with Grace Line?
Mr. Kharasch: Before you answer that question, Mr.
Consolo—
301
[ have a continuing objection to this inquiry, because it
does not bear on the issues in this case, and I want to ad-
yise Mr. Consolo of his—I guess it is a constitutional right
to consult with his attorneys if he wishes to, before he an-
swers questions along this line.
Mr. Giallorenzi: Now I have something to say about
that, Mr. Examiner.
Examiner Robinson: You do not have to say anything.
[have already ruled that it is all right.
Mr. Lippman: Mr. Examiner, I want to interpose a
further objection on the ground that there is no foundation
laid in the record as to the existence of any agreement.
(fol. 204] Examiner Robinson: We are trying to dig it
out.
Mr. Giallorenzi: The witness has been—
Mr. Lippman: You are putting words in the witness’
mouth.
Examiner Robinson: Let’s not harangue about it.
I think you heve got to get to the bottom of it. It may
turn out to be nothing.
I think this goes to the very essence of your claim.
Q. Is there any agreement between you and Dover
Banana Company for the use of your space aboard the
Grace Line?
A. There is an oral understanding.
Examiner Robinson: We are getting somewhere.
When was it?
The Witness: From the first shipment, shipment No. 1,
July 30, 1957.
Q. Is that agreement still in effect now, Mr. Consolo?
A. The understanding is still in effect, yes.
Q. With whom did you enter into that agreement on
behalf of Dover Banana Company, Inc.?
A. With Charles P. Consolo, who is the President of
Dover Banana Company.
302
Mr. Kharasch: Meanwhile, my request—
Examiner Robinson: Certainly?
Mr. Kharasch: (Continuing) —for a recess, during which
I will publicly consult with my client.
Examiner Robinson: You go right ahead.
(A short recess was taken.)
Mr. Giallorenzi: What was the last question and the an.
swer, if any?
(Reporter reads back the last question and answer.)
(fol. 305] Q. Will you tell us the terms of this agree.
ment or understanding which was entered into between you
and the Dover Banana Company, Inc.?
A. They would use the space, Dover Banana Company
would use my space and buy bananas for one of my corpo-
rations.
Q. What consideration did you receive for the use of
this space, Mr. Consolo?
A. Selling them bananas.
Q. Will you please tell us for whose account the bananas
which arrived on the 8.S. Santa Olivia were sold?
A. For the account of Dover Banana Company.
Q. Was the net proceeds of $11,852.68 remitted to Dover
Banana Company, Inc.?
A. That is correct.
Q. You testified that in consideration of your giving
your space to Dover Banana Company, Inc.—
A. I didn’t give it to him, I made them use it.
Q. —you testified that by you making them use it, they
would buy bananas from your corporation?
A. That is correct.
Q. Which corporation is that?
A. That is an intermediary corporation.
Q. Intermediary corporation?
303
A. Yes.
Q. If that be so, why did R. Dixon & Co. show on Ex-
hibit 24 that the bananas were sold for the Dover Banana
Company rather than the intermediary corporation?
A. Because the intermediary corporation sells the ba-
nanas to Dover Banana Company in Guayaquil.
Q. What is the name of the intermediary?
A. Darien Refrigerated Shipping Company.
Q, Is that an Ecuadorian corporation?
A. No, sir, it is not.
Q. Do you know under the laws of what country or what
state that company was formed?
A. Panama.
Q. Panama?
A. Yes.
(fol. 306] Q. Are you the principal or sole stockholder of
that company, Mr. Consolo?
A. Iam the majority stockholder of that company.
Q. Is your brother Charles Consolo associated with you
in that company, Mr. Consolo?
A. No, he is not.
Q. Are you an officer of that company?
A. No.
Q. Are you a director of that company?
A. No, Iam not.
_ Q. Are these bananas sold by your intermediary corpo-
ration to Dover Banana Company, Inc. before they are
shipped on the Grace Line vessels?
A. They are sold to them F.O.B. Guayaquil.
* * * * * - *
Q. Referring to Exhibit 24—
A. Yes.
Q. —the fruit which was purchased from various
growers—
304
Q. Was that fruit purchased by the Ecuador Fruit
Company?
A. Yes, it was.
Q. For the account of this Panamanian corporation}
A. Correct.
Q. Then in turn the Panamanian corporation sold it to
Dover, is that correct?
A. That is correct.
Q. —you testified that funds were remitted for the pur-
pose of purchasing the fruit and meeting the other jp.
cidental expenses set forth therein?
A. Yes,
Q. And that there was also a bank expense of 74,52
sucres, is that right?
A. Yes, that’s right.
Q. Did you personally remit those funds or did the
Darien Corporation remit them?
A. Darien Refrigerated remitted this fund.
Q. The Ecuadorian Fruit Company, Incorporaied, the
fruit which they purchased in Ecuador?
A. Yes.
Q. —is that all for the account of Darien Refrigerated
Company, Mr. Consolo?
A. Yes.
Mr. Giallorenzi: Thank you.
* * * * * *
==
(fol. 307]
305
Hearing Room 705
November 11, 1958
45 Broadway
New York, N.Y.
(Mr. Consolo resumed his testimony.)
Examiner Robinson: Gentlemen, I’m ready whenever
anybody else is. Have we decided where the witness will
sit?
Gross examination.
By Mr. Giallorenzi:
Q. Now, you testified at the last hearing, I believe that
you have three-fourths of the space of the No. 4 upper
tween deck on the Grace Line vessel under a present con-
tract. And that your brother, Charles Consolo, has one-
quarter of the space?
A. Yes.
The Witness: That’s on the freighters.
Q. And how many cubic feet would you say you and your
brother have jointly?
A. Lwould say in the neighborhood of about 26,000.
* * * * * * *
Q. How many cubic feet would it take for each banana
to load—
* * * * * * a
Q. Well, assuming you have an 80-pound stem?
A. I would say on an 80-pound stem you could load
around 5,800 to 6,000 stems.
Q. And that prior to October, 1958, Turino gave up one-
quarter of the No. 4 lower tween deck and that was taken
306
over by Mr. Pallis of Banana Distributors? Did you knov,
Mr. Consolo, that Swanee and El Morro and Lebantino
and Turino were going to give up their space on the Grace
Line vessels?
Mr. Kharasch: As of what time?
Q. Let us fix it as of October, 1958?
A. I did not know definitely, but there was talk about it.
[fol. 308] Q. Did you know prior to October, ’58 that
there was talk about some of the Grace Line shippers giv-
ing up their space?
A. There was talk about it.
Q. Did you know when this talk commenced?
A. I don’t know, I think I was called up from Miami to
a meeting of all shippers on the Grace Line, the exact date
I don’t know, may have been in, I can’t fix the date exactly,
Q. Well, did you attend that meeting or meetings of all
the Grace Line shippers in 1958?
A. Well, I attended two meetings, that was all.
Q. Yes. Now, tell us and fix it as best you can when
these two meetings were held?
A. I can’t fix them, may have been in the spring of 58 I
think, and then there was one in maybe, in the summer of
D8, in that neighborhood.
* * * * * * *
Q. Did you ask Mr. Grossman what was the.purpose of
coming up to New York?
A. Well, there were several things disenssed, several
things. The question of reduced rates of the Grace Line,
and the question of trying to get a minimum of freight
weight for a certain period, the market was bad, a ques-
tion of trying to get, some talk on the question of trying
to get Standard Fruit on the ships and everybody giving
up a little space to Standard Fruit, and things like that,
nothing materialized, put it that way.
Q. Who was present at the first meeting in the spring
of 1958, Mr. Consolo, to the best of your recollection?
P
A. Mr. Staff was there. Mr. Morey was there. Mr. I. B.
Joselow was there. Mr. Lavilla and Indies Fruit Com-
pany. Mr. Lou Kurtz from the El Morro, I think that Mr.
Parver, Mr. Lou Grossman, I was there, Mr. Consolo.
There was an attorney Mr. Jack Friedlander was there,
too, 1 don’t remember this meeting whether there was Mr.
Sawanee, Mr. Levitt, Bill Levitt, from Sawanee, I think
he was at the second meeting, I don’t remember whether
Mr. Levitt was there. That’s the best of my memory.
(fol. 309] Q. Was anybody there representing Naboa or
Frutera?
A. Yes, Mr. Lovella was.
Q. And Naboa?
A. I don’t think Naboa was there, I think Mr. Siminari
second meeting.
Q. Did anybody keep an agenda of what was discussed?
A. I don’t know, I think Mr. Staff was taking notes. I
didn’t keep an agenda, there was a general discussion, and
everybody came up to listen to what everybody else had to
say.
0 What was the condition of the banana market then in
the United States?
A. It was poor.
A. I think the market was poor, I think it started some
time in January.
Q. Of 1958?
A. 58.
* * * * * * »
A. I think that meeting, I don’t know whether the first
or second meeting, trying to get together to submit a, I
think the first meeting to appoint a committee to go to
the Grace Line to try to reduce the freight rate, and try
to get a waiver of the minimum load. I believe that was
the purpose of the first meeting. If I remember correctly,
we talked about many things, general conditions and
Ecuador fruit wasn’t arriving too good in the United
States, large percentage of ripes. That was about the only
things I remember of that meeting.
307
308
Q. So, in other words, at that meeting you do remember
you discussed the condition of the fruit which was con;
in bad and that the price of the bananas in New York was
poor?
A. Well, something else was discussed, there was a plan,
a discussion about trying to get a central selling organiza.
tion, there were too many selling organizations on the
same ship. In other words, R. Dixon was there, Joselow,
Mr. Staff was selling bananas, and Banana Distributors
was selling their fruit, I don’t think that Naboa was in
that picture, he was selling Morro’s, and what’s this other
fellow, Martin Associates, and the Indies selling their own
fruit and too many prices being quoted, over the same
ship, trying to get a central organization if we could get
a company to sell the fruit in the account of all of the
importers.
[fol. 310] Q. Now, this committee, you testified to that
was going to approach the Grace Line, for talks affecting
the freight rates, do you know who it was, was any com-
mittee appointed?
A. I think there was, yes.
Q. Do you know who the gentlemen were?
A. Mr. Staff, Mr. Parvin and myself.
Q. Who went to the Grace Line?
A. Mr. Staff, Mr. Parvin, and myself.
Q. And did you ask him to reduce the minimum and
make other requests?
A. Yes, we did.
* * * * * * *
Q. And that was requests that had been made you testi-
fied to because the fruit business was bad, the banana busi-
ness was bad?
A. And the fruit wasn’t coming in good quality, and that
was it.
Q. Now then, you said you held a second meeting, which
was in the summer, 1958, is that correct, Mr. Consolo?
—_—
A. That is correct.
Q. And did you appear at that meeting?
A. Yes, I did.
Q. What did you discuss at that second meeting?
A. Discussed at that second meeting, about the same
thing, with the exception of trying to get each firm that
exports bananas to the United States who had their own
company in Keuador to instruct the companies to try to
ta stricter selection, better quality of fruit to come into
the United States, and we had Mr. Siminari, I think, who
was there, too, of the growers’ association, to go to Ecua-
dor and try to get a tax reduced, the export tax, and try
to get the exchange reduced to a dollar, or seventy-five
cents instead of $1.20 or $1.50, gives you more sucres on
the open market and then Mr. Lovett, came up to propose
that he would speak to the Standard Fruit Company,
Standard Fruit Company wanted two or three chambers
(fol. 311] on the Grace Line, if everybody would give up
a little space in proportion, to give two or three chambers,
there was some discussion about this, and about, I think, I
made a statement I said I don’t think we should talk to the
Grace Line, I said that was a matter for the Grace Line.
Later on I called up Mr. Magner and asked him that if
two or three chambers be given up from present shippers,
would he give it to the Standard Fruit Company, directly,
we didn’t want another shipper in it, because there was no
purpose in having another shipper in it, and he says he
would not. He says anybody wants to give up their space
let them write letters in requesting to be relieved of their
contract. So I didn’t pursue that any further when I knew
from the head that the space would not be guaranteed to
give to the Standard Fruit Company.
Q. Was there a request for a lower minimum on other
conditions reviewed after the September meeting, or
rather after the meeting in the summer of 1958?
310
A. I think Mr. Joselow said he was going to ask not for
a reduction in rate, he was going to take the initiatiy
wanted to reduce the minimum and rather than ship 100
per cent minimum, ship 66 per cent, or 75 per cent, he was
going to approach the Grace Line on that subject.
Q. Do you know whether he did that?
A. No, I do not.
Q. This request to reduce the minimum was because
bananas were not as good as they had been?
A. I would say that was part of it, and the poor market
in the States.
Q. A combination of both?
A. Yes. .
Q. And the second meeting, other than discussing giy.
ing up this space in favor of Standard Fruit Company,
did anybody else state he would give up his space?
A. Everybody talked about something. This was the
banana business, we don’t trust anybody. Put it that way.
There was talk about Staff giving up a half a chamber,
talk about Lovett giving up half a chamber, talk about
me giving up a quarter of a chamber.
(fol. 312] Q. How about Pallis?
A. Everybody was mentioned in the discussion. About
the space, that’s not saying we would have carried out,
just talk.
Q. But there was talk about giving up space?
A. That is correct.
Q. And that talk then became a fact when Sawanee and
Lebantino and El Morro, Turino gave up space, Grayson
also?
A. From their point of view, it was a fact they gave up.
Q. When did you first learn that they definitely were
giving up space, that is, Sawanee and Grayson, Lebantino,
El Morro, and Turino?
A. I learned about it after the Grace Line awarded this
space to whoever received it from Naboa, West Indies,
and I was kind of disturbed about it, I called up the Grace
Line, told them the least they should have done was notify
me that they had letters in their possession of certain
311
ple giving up space, and offering me some of it.
Whether I would have rejected it or not, that is something
0. Did you confirm that conversation in writing?
A. No, I did not.
Q. Between the summer of 1958 when you had the sec-
ond meeting and when the Grace Line gave this space to
these different chaps or firms that people were intending,
shippers were intending to give up space?
A. There was talk about it.
Q. There was talk about it?
A. Yes.
Q. Did that arouse your curiosity?
A. Yes.
Q. And did you feel it wise at that time to inquire of the
Grace Line?
A. Yes, I did.
A. L asked after these conversations after this meeting
I was always in contact with the Grace Line, I was always
checking with them, I asked them if they had received these
letters, in other words, there was talk of people going to
give up, I asked, I think Charlie Nash, I don’t remember
(fol. 313] exactly, I spoke to both of them if they had re-
ceived letters from shippers requesting to be released from
their contract, and he says no, I haven’t received a single
letter yet.
Q. Now, did you inquire again of him?
A. The next time I inquired about him was after they
were given out and I talked to him. At least, I should have
been notified.
Q. Now, you knew, or you had some inkling they were
going to give some space to speak about it?
A. Yes, there was talk about it.
Q. Did you request in writing that you be given space?
A. No, I did not in writing.
312
Q. Why not?
A. Because my contact with the Grace Line, I didn
think it necessary to write letters.
Q. If it was necessary for the others to write letters
and you inquired why didn’t you put yourself on record
that you wanted space?
A. Because I was constantly in touch with them, I spoke
to the Grace Line two or three times a week.
Q. And still you didn’t think it necessary to write a letter
requesting space, although you thought it was necessary
for the other shippers?
A. No.
Q. Isn’t it a fact—
Examiner Robinson: Just a minute.
Mr. Kharasch: Objection, arguing with the witness.
Q. Isn’t it a fact at that time you didn’t want any addi.
tional space and that is the reason why you did not put
a request in writing?
A. It is not.
* * * * * * *
Q. Isn’t it a fact that the reason you didn’t request space
in writing from Grace Line prior to October, 1958 was due
solely to the fact that you did not need the space, did not
want it?
A. That is not so.
[fol. 314] Q. Now, prior to July 20, 1958, do you know
whether the Chilean Line went down the West Coast of
South America?
A. Yes.
Q. And you knew that they had gone down that coast
for quite some time?
A. Yes.
Q. Why didn’t you request space prior to July 28, 1958
from the Chilean Line?
A. I think there was one time before that, I don’t re-
member whether ’57 or 56, I don’t remember the year now,
I went up to see Mr. Campion, at that time, and asked
313
him for his schedule, on the Chilean Line, and he couldn’t
give us a schedule every two weeks, it ran every eighteen
days, every twenty days, and at that time the ships were
stopping at Havana, this is, I’m quoting now what he told
me, and that he couldn’t guarantee an arrival date into the
United States, maybe twelve, thirteen to fourteen—well,
at those late days arrival, I was not interested in shipping
pananas. Now I discussed it with him on this particular
trip, the ship was not going to call—as a matter of fact,
one ship before that, I was going to book, but that ship
was going to call at Havana, and stop for forty-eight hours,
he says, seventy-two hours, I says that ship I don’t want,
I says they have to guarantee there was going to be a
schedule every two weeks, and some ships were not going
to call Havana, come direct from Puna to Baltimore. I
pick the Port of Baltimore, because he says it takes eight
to nine mornings for arrival in New York, but he wanted
to put a maximum of eleven days to cover himself in the
contract, but the understanding was the ship was in Balti-
more before the eleventh morning, eighth, ninth or tenth,
and that is the reason why I went into this deal with the
Chilean Line this time because of the arrival dates, in New
York, and bananas were arriving in good condition eighth,
ninth and tenth morning.
Q. Well then, your principal objection to the Chilean
Line service prior to entering into these contracts, Exhibit
34, was that as a regular port of call on their northbound
service they stopped at Havana for a period up to forty-
eight hours?
A. Well, I didn’t care how many days they stopped at
(fol. 315] Havana, they got a right to stop at Havana, now,
but I didn’t want no maximum or eleventh morning in
Baltimore arrival for the bananas.
Q. Well, I thought your testimony was that you were not
interested in Chilean Line service prior to this date because
they called at Havana, that you only became interested when
they assured you they would omit the Havana call and they
arrived in Baltimore a maximum of eleven days. Was that
the conversation you had with Mr. Campion?
314
A. Yes, they still have a right if they want to put ing
call into Havana, the contract doesn’t state they have to
come directly to Baltimore. They have a right to stop, but
they cannot come any later than the eleventh morning to
Baltimore, and he told me they are not going to stop at
Havana and that the arrival date in Baltimore would be
sooner than eleven days.
Q. When you say he, I assume you are referring to Mr.
Campion?
A. Yes.
Q. If Mr. Campion told you that the vessels would not
omit Havana as a port of call, would you have used them!
Examiner Robinson: Was that expressed in these con.
tracts?
The Witness: Because it depends on what day he would
arrive in the United States, what morning for the delivery
of the bananas.
Q. Isn’t it a fact it all depended on how long they stayed
in the Port of Havana?
A. They have that call, they know what they have to load,
Examiner Robinson: What you are interested in is lapse
of time for the ship to arrive for discharge?
The Witness: Yes.
Q. Do you know how long the Chilean Line vessels used
to stay at Havana when they arrive there?
A. No, Ido not.
Q. Do you know whether one day or five days?
A. No.
Q. Do you know whether any Chilean vessels have made
a run from Guayaquil to New York, or Baltimore, includ.
ing stop at Havana, in eleven or less days?
A. No, I don’t know.
[fol. 316] Q. If the usual trip of the Chilean Line, stop-
ping at Havana, which was a regular port of call on the
northbound voyage was more than eleven days, would you
have booked with them?
A. If it ran over to the twelfth morning delivery, as a
regular schedule, I would not have booked them.
315
Q. When did you learn that the Chilean Line dropped
the Havana line port?
A. Information from Captain Roza who sent me a sched-
yle for the entire year after July of 1958 as to when the
ships were going to call at Puna and when they were going
o arrive at Baltimore, I have the whole year advance
schedule.
Q. Is it your testimony that prior to July 20, 1958 you
did not know they were going to drop that Havana port?
A. No, I did not. I couldn't, in July, maybe two weeks
after that, when I spoke to them over the phone.
Q. You didn’t know they were going to drop Havana?
A. He says one more ship going to call Havana and he
said after that one, not going to call there.
Q. Well, isn’t it a fact you called Mr. Campion when
you learned that vessels were not going to stop at Havana?
A. No, I called him to find out what the schedule was
going to be, on the Chilean Line, I did not know anything
at the time that I spoke to Mr. Campion, or Mr. Slattery,
Campion was on vacation.
Q. You spoke to Mr. Joseph Slattery?
A. I think that is it, and I spoke to Captain Roza.
Q. And Campion at that time when you first called was
on vacation?
A. Yes, I believe he was on vacation.
Q. And you say at that time you did not know they were
going to drop the Havana call?
A. No, I did not.
Q. Now, when you had made inquiries prior to this par-
ticular time in July, 1958 as to the number of days that
the vessels would take to come from Guayaquil to New
York, did you know how long they would take to make that
run?
A. If it came directly to my knowledge?
(fol. 317] Q. No, if that vessel stopped at Havana?
A. No, I did not know, because they told me at that time
they would not guarantee any tenth or eleventh morning
arrival in New York, so at that time the ships just come
316
to New York, couldn’t guarantee any tenth or eleventh New
York arrival.
Q. Would you consider any vessels which stopped at a
South American port northbound after loading bananas at
Guayaquil, would you consider that service suitable?
A. Yes. The Grace Line does that, all their ships north.
bound.
Q. What ports do the Grace Line stop at?
A. To the best of my knowledge I think they stop at
Buenaventura and this one, the name I spoke of, I think
they call at two ports making the fishing date going south.
bound and picking up the fishing date coming northbound.
Q. How long did they stop at Buenaventura, the Grace
Line vessels?
A. I don’t know the exact time.
Q. Well, approximately?
A. They’re supposed to claim twenty-four hours to
thirty-six hours.
Q. To your knowledge, thirty-six hours?
A. No, in the contract, it says that.
Q. Well, the selling price would not be affected by dates
of arrival, it would be affected by other circumstances?
A. That is correct.
* * * i * * *
Q. Did you consider making a bid for a part of the entire
space a proper bid?
A. Did I consider it?
Q. Yes. For the entire space a proper bid?
A. I don’t understand the question.
Q. Well, when you made this bid on March 6, 1957—
A. Yes.
Q. —did you consider bidding for the entire space with
the exclusion of other shippers as a proper bid?
A. I only bid at the request of the Grancolombiana Line.
If they had asked me to bid on one chamber, or offered me
one chamber, or parts of a chamber, at a given figure, I
would have responded to it.
a
317
Cross examination.
By Mr. Giallorenzi:
(fol. 318] Q. You testified that the entire No. 4 upper
tween deck which is used by you and your brother on the
contract, I don’t know who it is used by on the contract, did
carry at least 6,000 stems?
A. Depending ou ‘he size of the stems.
Q. Pardon me?
A. Depending on the size of the stems, about 57 to 63,
that’s depending on the size of the stems. I think that’s
about the figure.
Louis F. Mrver being first duly sworn testified as follows:
Direct examination.
By Mr. Lippmann:
Q. Let’s see if we can clarify that a little bit, Mr. Meyer.
Do the same customers look to you for bananas more
frequently than once a week?
A. Oh, yes.
Q. Do they purchase from you more frequently than once
a week?
A. That’s right.
Q. These are the same customers?
A. That is right.
Q. If you were not able to, or if you had no bananas to
sell them, would they have to go elsewhere for their require-
ments?
A. Definitely.
Q. From the standpoint of your ability to sell bananas,
Mr. Meyer, would it make any difference whether the
bananas arrived at Philadelphia, or New York?
A. No.
318
Q. From the standpoint of prices at which such bananas
could be sold, would it make any difference whether they ar.
rived at Philadelphia, or New York?
A. No.
Q. Has it been your experience that the market price for
bananas in Philadelphia is the same, or approximates the
prices realized in New York?
A. I believe they are the same.
[fol. 319] Q. At the present time, Mr. Meyer, can you sell
for Mr. Consolo’s account, up to an additional 14,000 stems
a week?
A. Oh, yes.
Q. At what prices?
A. Well, at the market price.
Q. At all times since October 19, 1957 which, I believe, is
the date of the first shipment you handled for Mr. Consolo—
A. (Interrupting) October 21st.
Q. October 21, 1957.
A. Yes.
Q. Could you have handled up to an additional 14,000
stems of bananas for Mr. Consolo’s account?
A. Yes, I did prior to October 21st. The previous week
I had 40,000.
Q. Could you have sold such bananas at the prevailing
market prices?
A. That’s right.
Q. Could you have also sold an additional 5,000 stems of
bananas each week if such bananas had arrived at Philadel.
phia at all times since October 21, 1957?
A. Yes.
Q. At the same market prices which prevailed at New
York?
A. Yes.
319
Cross examination.
By Mr. Giallorenzi:
Q. You testified, Mr. Meyer, that it really did not make
any difference price-wise, or otherwise whether bananas
came into New York, or Philadelphia, except that the local
urchaser, or consumers of bananas in New York—
A. (Interrupting) They do.
Q. (Continuing) —would prefer—
A. (Interrupting) —they do prefer the local trade, do
prefer.
* * * 7 * *
Maxwett Boyarsky having been first duly sworn, testified
as follows :
Direct examination.
By Mr. Kharasch:
Q. Mr. Boyarsky, will you state your address for the
record?
A. 1737 H Street, Northwest, Washington, D.C.
(fol. 320] Q. What is your occupation, Mr. Boyarsky?
A. Certified Public Accountant.
Q. How long have you been a Certified Public Account-
ant?
A. Approximately seven years.
Q. Is that in Washington?
A. In Washington, that’s right.
Q. Are you regularly employed as a member of some
company’s staff, or are you independent?
A. No, I have an independent Certified Public Accountant
firm.
Q. Are you a member of any professional societies?
A. Yes. Iam a member of the American Institute of Cer-
tified Public Accountants. I am a member of the District
of Columbia Society of Certified Public Accountants.
320
Q. Will you look at Exhibit 24 which has been identified
as on Page 1 a loading sheet, for shipment No. 34, Santa
Olivia, Page 2, an outturn sheet, and Page 3, liquidation
sheet. Are you familiar with a long series of these docy.
ments?
A. Yes, Iam.
Q. Let’s turn our attention, please, to Mr. Friedlander’s
testimony as to unloading costs in Philadelphia. I would
like to know, Mr. Boyarsky, how much per stem it costs to
unload the 9,374 stems of Pan-Ecuador Company’s fruit,
and I want you to exclude from your computation, please,
any costs which are already reflected on Page 3 of Exhibit
24. In other words, for example, if Mr. Friedlander pro.
vided us with a figure for weight, and you find on Page 3
of Exhibit 24, a figure for weighing which already appears,
please exclude that cost in computing unloading costs per
stem.
A. I made a computation based on the number of stems,
and the shipment that Mr. Friedlander described, and the
cost which Mr. Friedlander outlined. I arrived at a figure
of 35.15 cents per stem.
Q. Mr. Boyarsky, let me read you the two sentences from
the case of New Mexico ex rel. McLane v. Denver & Argr
Co., 203 U.S. 381, or rather 203 U.S. 38.
[fol. 321] Q. I am about to quote, Mr. Boyarsky: “At
common law, a cause of action arose from the refusal of a
common carrier to transport goods duly cendered for car-
riage. Ordinarily the measure of damages in such cases is
the difference between the value of the goods at the point
of tender, and their value at their proposed destination, less
the cost of carriage.”
Question: Was that measure of damages the measuring
stick for damages which you were asked to assume?
A. That is correct.
Hearing Room 818
November 13, 1958
45 Broadway
New York, N.Y.
Q. Let’s turn to Exhibit 42, please. And before we go into
the reasons for the various calculations, let’s get in the rec-
ord for each column exactly where the information comes
from and how the figure was obtained. Now, on Exhibit 42,
the column at the very far left is labeled “Index.” What are
those numbers?
A. These are numbers which I used to reference the vari-
ous sailings as located on my summary sheet. |
Q. They were simply assigned numbers serially to each
of these sailings?
A. That’s right.
Q. Now, the sailings, the voyage number and the ship
names, Which we see in columns 1 and 2, are ships of what
carrier?
A. Grancolombiana Lines.
Q. And have you entered a voyage number and a ship
name in chronological order?
A. That’s right.
Q. For all Grancolombiana sailings?
A. That’s correct.
Q. And the period is November 5, 1955, taking the sailing
date from, let’s say through September 1958—actually we
have some figures for October.
A. We have some for October but we didn’t have all the
information on them. It runs through September 25, as far
as having all the complete information.
ae)
(fol. 322] A. In column 10 I have the stevedoring taken at
a 35% per stem charge applied to the number of stems
shipped on the Grancolombiana sailing, which is shown in
column 5 and then I multiplied column 5 by that 35¢ rate.
Q. Where did you get the 35¢ figure for preparation of
this column ?
322
A. I was given that figure. It was my understanding that
the cost of stevedoring in Philadelphia was discussed with
other people, and I felt that this would be approximate ¢ost
of stevedoring in Philadelphia.
Q. At the beginning of your testimony yesterday, I asked
you to go through some of Mr. Friedlander’s figures, and
would you state again the computed stevedoring in Phila.
delphia?
A. Well, I took the figures that Mr. Friedlander had
listed when he appeared at this hearing, and I came up with
a figure of 35.15¢ per stem.
Q. Or quite close to your 35¢?
A. That’s right.
Q. All right. Now, would you state again so we can pro-
ceed, how you computed column 10?
A. Column 10 is the total stevedoring cost at 35¢ per stem.
for the number of stems aboard the Grancolombiana vessel,
which is shown in column 5.
Q. And how about column 11, Mr. Boyarsky?
A. Column 11 is the total stevedoring cost for the number
of stems shipped on the Grancolombiana vessel at 48.8¢ per
stem.
Q. And that 48.8¢ per stem represents what?
A. It’s an actual Consolo expense in New York for steve-
doring.
Q. At the twelve dollars and a half-cent per ton?
A. Twelve dollars and a half-cent per ton.
Q. So, as I understand, your columns 10 and 11 are alter-
nate calculations at different assumptions of stevedoring!
A. That’s right.
Q. Now, having had the benefit of hearing Mr. Fried-
lander, are you prepared to choose an actual rather than
assumed stevedoring rate?
A. Well, on the basis of the figures detailed by Mr. Fried-
lander, I could use a 35.15¢ per stem cost instead of the
figure in column 10 for the cost in Philadelphia.
[fol. 323] Q. Now, what appears in column 12, Mr. Boyar-
sky?
323
A. Column 12 shows the net profit at a 35¢ stevedoring
cost and that figure would be column 9, which is the total
profit before stevedoring and freight, which I described pre-
viously, less the freight paid to Grancolombiana as listed
on the document which was submitted to me, and less the
stevedoring which is shown in column 10 at my assumed
rate of 35¢ per stem.
By Mr. Giallorenzi:
Q. Well, now, tell us what instructions you received from
Mr. Kharasch the first time you were retained in this mat-
ter?
A. Mr. Kharasch called me and said he would like to dis-
cuss a matter with me which would involve use of myself
and my staff from the accounting point of view. I discussed
with him the problem. He indicated to me that the problem
was to ascertain what the amount of damages would be sus-
tained by an individual based on certain information. He
then presented to me the documents which I previously men-
tioned to you; the loading sheets; the outturn sheets; the
liquidation sheets; the eards that you see here, the Gran-
colombiana cards, the other supplementary data which we
diseussed. He said this is the information which we have.
“We are trying to determine what, if any, are or would be
the damages sustained by Mr. Consolo as a result of having
been refused shipping space on Grancolombiana ships.”
Now, with that preface, we then went into the documents,
discussed the meaning of the documents. I posed certain
questions to Mr. Kharasch; Mr. Lippman was in on the con-
ferences; I posed certain questions to him. We talked about
those points which were not clear or which needed additional
clarification and then I sat down and set up preliminary
worksheets to try to get at the information from the docu-
ments which I had. I discussed the setting up of the work-
sheets, which I have right here, with both Mr. Kharasch and
Mr. Lippman. I want to emphasize that nobody told me
what to do or how to go about this. I was given certain in-
formation. I was told of a problem and I was asked to use
[fol. 324] my accounting ability to develop this information
324
in a clear mathematical manner, and that is what I tried to
do.
. * . . * * .
Hearing Room 3553
New GAO Building
Washington, D.C.
Friday, November 21, 1958
- * + * * * .
Jose J. Borrero was recalled, having previously been duly
sworn, testified as follows:
Direct examination.
By Mr. Giallorenzi:
Q. Mr. Borrero, you have been previously sworn in and
you have testified that you are or have been the Acting
General Manager of Transportadora Grancolombiana,
LTDA., the General Agent in the United States of Flota
Mercante Grancolombiana and that you are now the Execu.
tive Vice President of Grancolombiana, N.Y., Inc., which is
the general agent in the United States and Canada for Flota
Mercante; is that correct?
A. Yes, that is correct.
* * * 7. . ~ .
[fol. 330]
Hearing Room 4519
New GAO Building
Washington, D.C.
Tuesday, December 2, 1958
* . * * * . .
Mr. Rosenzweig: Before I begin with Mr. Friedlander, I
would like to ask, Mr. Examiner, if you will take official no-
tice of the Grace form contract which Grace employs in
connection with the carriage of bananas for the shippers of
bananas on the Grace Line, copies of which contracts are in
accordance with the Board’s order in the Grace Line’s cases
on file with the Board.
[fol. 331] Mr. Lippman: We already have in evidence,
Mr. Rosenzweig, copy of the Consolo contract.
_—
——
325
Mr. Rosenzweig: Yes. If you will just agree with me that
the Consolo contract, except as to the terms of space and
naturally the hire because of the difference in space, is the
same as every other contract—
Mr. Lippman: I couldn’t make that stipulation because
] just don’t know.
Mr. Blackwell: I was wondering, Mr. Rosenzweig, at
yhat particular date would this official notice take effect?
Now, I am not sure that the order in the Grace Line case
requires the carrier to submit every contract that it has
ever entered with an individual shipper since the time of the
decision and, as I understand it, some additional space has
heen allott.d and contracts may have been changed, and
those contracts may never have been filed with the Board.
Mr. Rosenzweig: I think the Board’s order, Mr. Black-
yell, requires the file or copy of each contract to be entered
into with shippers.
Weil, nay I request then, that the Examiner take official
notice of the contracts which are on file with the Board.
Mr. Blackwell: Fine.
Examiner Robinson: I think I can give you a little infor-
mation on whether the newer contracts—you know, the
people who got extended space, in this letter from Grace
Line to the Secretary October 21, 1958, in which he states
the names of the existing shippers who are no longer with
him and the space has been given to others. It says:
“The additional space has been provided on the same
basic terms and conditions as contained in the contracts
heretofore filed with the Board. The new space allot-
ments and operational factors has resulted in changes
in vessel compartments provided certain shippers.”
Mr. Blackwell: That takes care of my question.
Examiner Robinson: Why don’t you just say the parties
have no objection to letting me and the Board take cog-
nizance of them? That will eliminate any question.
Mr. Dougherty: We certainly have no objection.
Mr. Lippman: No objection.
326
[fol. 332]
BeroreE THE FeperaAL Maritime Boarp
Transcript of Proceedings—(Excerpts)—May 9, 1960
Room 705
45 Broadway, New York, N.Y,
. . . ° ° ° e
Mr. Giallorenzi: We are ready to proceed, Mr. Examiner,
Mr. Giallorenzi: Mr. Examiner, I would like to make a
statement before any evidence is introduced.
* * * . * .
(Mr. Giallorenzi:)
I therefore request that since the reparations period en.
compassed by the complaint and the supplemental complaint
is from July 1955 to September 1951, that we have available
at the time we intend to cross examine Mr. Consolo on the
complaint the following documents for those years: the
tax returns, profit-loss statements and balance sheets of Mr.
Consolo, the Dover Banana Company, which you recall was
the shipper on the Grace Line freight which had been as-
signed to Mr. Consolo, Darien Shipping & Trading Com.
pany, which he admitted was a Panamanian corporation
which purchased the fruit from Ecuador Fruit Company, an
Keuadorian company, because, as I recall, the testimony was
that the chain of the transaction here was the Ecuador
Fruit Company would buy in Ecuador and would sell it to
the Darien Shipping and Panamanian Company, and then,
Dock Banana, in which Mr. Consolo was a minority stock-
holder, stepped into the picture and took over his space. In
addition to that, in 1957, when the space came up for re-
newal, Grancolombia addressed Atlantic Fruit & Shipping
Company, one of Mr. Consolo’s corporations.
And since this is the time for which they are seeking to
recover substantial sums from Grancolombiana, I would
like to press with all the vigor that I have at my command,
the request that those documents be made available to us.
327
Mr. Kharasch: Mr. Examiner, I would like to note one
thing. At the last hearing, there was an explicit offer on
the record to accommodate any Grancolombiana witness on
the subject of reparations that was then available, both by
(fol. 333] myself and by Mr. Kurrus who was then here.
As to the document, if you will give me two minutes, I will
fnd in the record your explicit ruling on the same request
made at the last hearing, and I think my comment might be
a little more pointed if you will suspend for two minates,
and I will find it in the record.
Examiner Robinson: Go ahead.
Mr. Giallorenzi: Yes, Mr. Examiner, I did ask for the
(profit and loss] statements on two occasions, and those
statements for Mr. Consolo that you expressly denied my
request for. But I am renewing it now, because at this par-
ticular time of the proceedings we are directly involved
with reparations.
I do not think it is necessary for Mr. Kharasch to look
through the record. I concede that you denied my request on
two occasions, but despite that denial, I again press my re-
quest, because I feel that this is the proper time that we
must see these documents in view of the enormity of the
demands which they are making against Grancolombiana.
Examiner Robinson: Does anyone have any recollection?
I frankly don’t. .
Did I give a specific reason for it, or did I give a cate-
gorical denial?
Mr. Giallorenzi: On my second request, you said, “I ex-
pressly deny it”, pretty emphatically.
Examiner Robinson: Did I give any reasons for that?
Mr. Giallorenzi: No, just the denial.
Mr. Kharasch: There was a denial, as Mr. Dougherty
points out, at Page 828 of the record, and there was some
discussion ahead of it, which I haven’t yet found, To re-
fresh your recollection, Mr. Examiner, this identical de-
mand arose when Mr. Boyarsky had put in his computations
based on evidence of the cost of bananas in Ecuador and
evidence of the sales price of bananas in the United States.
——y
And, as we explained at some length in the previous por-
tion of this hearing, we used records available to Mr. Con.
solo to show banana sales prices in the United States with
~~which we were concerned on our theory of damages, show.
(fol. 334] ing the difference of the market price in the
United States and the market price in Ecuador, less freight
and stevedoring charges on Grancolombiana—that is, our
claim is based on Grancolombiana’s exclusion.
The Grace Line profit or loss is completely immaterial be.
cause Grace Line freight is not involved. Grace Line
stevedoring is not involved.
You will recall that when we had a purchase price for a
certain date in Ecuador and the corresponding sales price
for some ten or twelve days later in the United States, we
used hose evidences of the market and applied them to each
Graolombiana sale during the reparations period.
Aad when, for example, if we had a Grancolombiana sail-
ing, let us say, on the 30th day of June, we look for the
closest evidence of the purchase market in Ecuador and
then we look also for the closest evidence of the selling
market in New York, in order to establish what the damage
would have been if bananas had been shipped, had been
able to have shipped with Grancolombiana, as Mr. Consolo
explained at that time.
I think we went around and around a couple of times on
the argument. This is not a case against the Grace Line.
The Grace Line figures are used as evidence of market and
the personal financial data that Grancolombiana is seeking
has absolutely nothing to do with the state of the market
in i.cuador on the date of the shipment, or the state of the
market in New York on the date of arrival.
Examiner Robinson: At the moment, I would just limit it
to the method on which we already were proceeding, and I
will think about this thing, and I don’t want to prejudice you
at all and I will give you plenty of time to get it if I finally
decide to change my mind.
We will stick by the way we were going, but you are not
going to be precluded, because I certainly think you are en-
titled to every consideration I can give you.
aa ce ——————
328
——
Mr. Giallorenzi: It is clear to my mind that you have de-
ferred your ruling on my request. There is no ruling on the
record?
——~"Fxaminer Robinson: That is right. If Tmake up my mind
Jater on, I will be glad to change it.
329
(fol. 335] Max Boyarsky was recalled as a witness and
having been previously duly sworn was examined and testi-
fied as follows:
Direct examination.
By Mr. Kharasch:
Q. Mr. Boyarsky, Exhibit 110 is a list of Grancolombiana
arrival dates, tons outturn, cost and cost per ton.
Were these figures supplied to you by Mr. Consolo
through our office?
| A. Yes, they were.
Q. Did you use the average figure of $12.41 per ton, ap-
pearing at the bottom of the page, as a figure for steve-
doring and computing damages in the exhibit itself?
A. That is correct.
Q. And in column (10), what figures do you show?
A. The total stevedoring at $4.51 per stem—excuse me—
at $.451 per stem.
Q. Will you explain, please, where you obtained the figure
of $.451 per stem?
A. We calculated that on the basis of the average steve-
doring cost per ton. We referred to Exhibit 110, which
shows the calculation.
Q. And how did you refer it to tons and stems?
A. From the basis of a differentiation to arrive at cost
per pound and apply that to the average weight per stem.
Mr. Giallorenzi: What did you use, short tons or long
tons?
The Witness: Two thousand pounds for tons.
330
Q. Mr. Boyarsky, at the earlier hearing you prepared in.
terest computations, which was marked as Exhibit 44,
_..Would you tell us whether you have made a similar com:
putation for this hearing?
A. No, I have not.
Q. Why not?
A. Because I felt that that computation could be arrived
at very quickly when I knew the exact dates which would
be used, because I think this would continue to run on the
damages until the date of settlement was arrived at.
(fol. 336] Q. In other words, the earlier interest exhibit is
not much good to us, because it represenis interest up to a
date already passed?
A. That is right.
Q. Would it be a simple accounting job to compute the
interest rate?
A. Yes, it would be a simple process.
Q. As soon as you have the date which is the cut-off date,
you mean?
A. That is right.
Mr. Kharasch: Mr. Meyer, will you take the stand, please,
Louis F. Meyer was called as a witness, and having been
previously duly sworn, was examined and testified further
as follows:
Direct examination.
By Mr. Kharasch:
Q. Mr. Meyer, you testified at the last hearing in this
case?
A. Yes.
Q. I would like to begin, while Mr. Boyarsky is still in
the room, by placing before you a file which contains certain
documents labeled “Cargo Out-Turn Sheets,” and certain
331
documents that have been referred to as “Liquidation
Sheets.”
A. This is it.
Mr. Kharasch: Mr. Boyarsky, will you come a little closer
to the stand, so you can see these documents as Mr. Meyer
testifies.
By Mr. Kharasch:
Q. Mr. Meyer, were these out-turn sheets which I am
showing you, covering voyages between October 21, 1957
and October 30, 1958, in this file, prepared by R. Dixon &
Co.?
A. Thot is right.
Q. Weve the liquidation sheets prepared by R. Dixon &
Co.?
A. That is right.
Q. Do the out-turn sheets and the liquidation sheets accu-
rately reflect the selling price received for this group of
bananas ?
A. That is right.
Q. Will you look through the entire file, on both sides, and
see if you recognize all the documents as documents pre-
pared by your company?
A. Yes. I will testify to that. That is correct.
* * * * a * *
(fol. 337] Sumxo Apr was called as a witness, and having
been previously duly sworn, was examined and testified as
follows:
Direct examination.
By Mr. Kharasch:
Mr. Kharasch: Mr. Boyarsky, will you again watch as I
show these files to Mr. Adir.
Mr. Boyarsky: Yes.
332
By Mr. Kharasch:
Q. Mr. Adir, will you look at the cargo out-turn sheets
for October 15, 1957 and earlier, also the liquidation sheets}
Would you examine the file and state whether those out.
turns and liquidations were prepared by your company?
A. That is correct. They were.
Louis F. Meyer resumed and testified further as follows:
Direct examination.
By Mr. Lippman:
Q. Mr. Meyer, you have previously testified in this pro.
ceeding, I believe in November of 1958?
A. That is right.
Q. Do you recall, sir?
A. Yes.
Q. And you testified at that time that your company,
R. Dixon & Co., was acting as commission agent for the sale
of the bananas imported by Mr. Consolo on the Grace Line,
is that correct?
A. Correct.
Q. Now, during the period of November 1958 up to Sep-
tember of 1959, could you have sold for Mr. Consolo’s ac-
count up to an additional ten to twelve thousand stems each
week?
A. Definitely.
Q. And at what prices could that amount of bananas have
been sold?
Mr. Giallorenzi: I object to this. This is very, very
speculative, what prices they would be sold at, because cer-
tainly 12,500 additional stems in the market might mean a
downward trend in the prices. It depends upon what the
[fol. 338] other fruit companies were bringing in, what the
conditions of the market itself was here, how many bananas
were being exported by the other companies; and I don’t
—_—
333
think that Mr. Meyer, with all his experience in the banana
business, is that good a witness.
Examiner Robinson: You may cross examine him in due
time and try to bring out any weaknesses which you hope to
fnd. There is nothing wrong with the inquiry.
Examiner Robinson: You may answer the question.
The Witness: Repeat the question, please.
(The last question was read by the reporter.)
The Witness: The current market prices prevailing at
that time.
Cross examination.
By Mr. Dougherty:
Q. What is your best recollection? Did you, from Octo
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